As far as I'm aware the lifetime tenancy was done away with in 2011/2012 replaced with a rolling five year tenancy agreement.
Wrt downsizing, if only it was that easy. A neighbour here has a three bed, one child has left home and she wants to downsize to a two bed. Most of the places she's seen with two beds have higher rent than her three bed, she can't move too far because of school and work, people don't want to swap with her.
I'm sure that most people - not all - would want to downsize, but it's not that easy. It's hard to swap, it's hard to get a transfer there aren't large numbers of exactly the right number of bedrooms for x tenant to move to y tenants HA/council home.
Ultimately, the problem is lack of social housing, not people "selfishly" stopping other families from getting a larger home.
And yes, we are tenants and not owners, but we all have the right to security in our homes, we all have the right to live securely and work if we can, we all have the right to not be judged by people who think that you should only live in social housing if you are dirt poor and should leave when you're not.