"It is not possible for the Council to have a policy of non-enforcement of the legislation especially in respect of one particular type of entertainment. "

That really is a load of cobblers. Any organisation with a duty of law enforcement has coinsiderable leeway in deciding when to act and when not to act. The police do it all the time, as demonstrated with the easing up on cannabis, in advance of any change in the law.

And there are all kinds of totally crazy bits of law still on the statute book in all countries which are sytematically ignored. (Here is a site from America that lists various crazy laws that exist or have existed until recently in the States.)

Councillors who believe this kind of stuff from officers and go along with enforcing things they feel are wrong aren't fit to be councillors. Yes, there are limits on the freedom of a council, but they aren't as narrow as these councillors were given to believe. And chose to believe.