I agree with Yamadori that it's feasible there's way more to this than meets the eye. It sounds feasible that ex DIL could be in on it all, which means SS would likely know about it.
I think his Dad wouldn't want to believe that his son could be so heinous. From experience, my Grandmother was open about her will, it changed so the amount payable to the GC was increased. There's a big gap between the eldest GC and the youngest, I'm on the elder side of the spectrum. I've seen first hand cousins talking in front of my Grandmother at 15/16 about this money they were getting, which happens to be £10k. They're older now and do not even visit even though they have had children of their own. (Mostly because their other Grandmother doesn't let them leave the house without cash in hand. My GM has been very generous to all of us over the years, so her money is what she lives off and inheritance is now split between her children to distribute so it's more equal.)
I would have said back then that the GC that was talking about it or Grandchildren, weren't exceptionally bright. But they knew the value of this money. That is was a considerable amount back then. Even now to me £1000 is a lot of money, regardless of savings. So don't be duped into thinking oh he's not that bright, I don't think he has the capacity.
I'm sure he knows how much his favourite trainers would be, or how much a new game for the latest console would cost. If you bear that in mind, he'll know full well that whilst £10k might not be a lot to his GM, it's still a considerable sum.
If my children get their hands at their wallet and purse, both know what they have and what it equates to in terms of certain products. We put pocket money in, we buy what they need, but if it's something significant and a long way off their birthday or Christmas, they'll know how long they need to save. One is at primary school, the other secondary.
I've NC as I didn't like my last name, but I think I said I wouldn't expect my DD to know what £10k is worth. But DS certainly does as he's like a hawk when it comes to his savings account.
I don't want it to be investigated without you even contemplating that the GS could be implicated, in what is the most stupid story or one of the most stupid stories, I've ever heard.
If you contact the 'friends mum' go maybe as if you're concerned about her situation, print outs from Shelter, see if she dares continue with it.
I don't know how old the GM is, but it sounds like the GS is at least egging that pudding, to pull on heart strings. I just get a feeling he isn't this clueless kid he's made out to be. Maybe that's a convenient front. Why would he be so worried about such a situation, when his friend could be housed in YMCA youth accommodation, which everyone considered pretty cool, having your own place.
Like I said if there is truth to it, there's been a benefits over payment, they simply have it on the account as a debt to be cleared. Social housing or council housing, I'm confident in saying that they'd push for eviction if anti social behaviour was involved. But a debt that significant in merely unpaid rent would have been addressed way before now.
I don't know why I'm assuming it's social or council housing. For a fact if it was a private rental, 2 months with no payment of rent and the landlord would be at the courts getting them evicted. Worse case scenario then is a CCJ for unpaid private rent arrears.
She wouldn't be in a tenancy like private rental, if a customer since before the changes, you basically get a lifetime tenancy, that's how organisations or councils would look at such a debt. Say a 3 bed semi, in most places you would be looking at around £110 a week if not less if she's been a customer for many years. So if she didn't pay for 5 years, base it on £100 a week with 4 rent free weeks, just under £5000. The government are reducing rents by 1% a year in that sector.