Your original question does not make clear whether the property occupied by the neighbour is owned by the local council, or whether it is owned privately. If it is owned by the council then they clearly have a duty to do something about the nuisance caused. They have the power to serve a Notice to Quit upon the offending neighbour and they clearly should do so. Try taking some advice from your local Citizens' Advide Centre, or Law Centre, (their advice is free) and take it from there. Nobody should be subjected to living in such conditions as you describe. I hope you have some success and well-earned peace and quiet.