Yes, the council will have its own legal department. As a result of the cuts, most l.a's have combined their legal departments, losing staff I expect. The l.a. legal department may have sought advice from counsel given the sensitivities. If it's appealed the court will have the benefit of expert legal advice and hopefully, can't criticise the council or reverse its decision.
To think that London, or anywhere else for that matter, does not belong to any one demographic