"I suspect the Council deliberately houses certain types in these places 'to keep them all together'"

They're called ghettos, let's not be polite about it, the Nazis used them, the apartheid regime in South Africa called them townships, a rose by any other name, the towns and cities in the American south had /have their so-called "Negro Districts", but call them what you will, they are plain and simply ghettos. Far easier to control the people that way, put them altogether.