It is not subsidised. In fact, it is illegal for councils to do this anymore.
This story is a little odd and I suspect there is more to it. The guy has only been charged. So they can't have issued the eviction notice on the basis of anything to do with the riots? I think Wandsworth are just trying to look tough by linking the two. There are probably other previous issues with this character.
Secondly, I doubt it will get past a judge. The same with most evictions. It is collective punishment, for one. For two, it is extra punishment for council tenants. For three, they have a duty of care to keep people off the streets. At worst, problem people or families just get shifted to new areas where they are a hassle for someone else. All a bit pointless and costly.