Nothing horrid about the static community, and nothing bad about making people send their children to school either -- I didn't mean to imply there was and I don't think I did actually. And yes, they do need an address in order to claim benefits. What problem do you have with the idea that they can claim benefits?
Once they are settled on a council site or on a developed site that they themselves own, they either pay rent to the council or pay council tax. On an illegal site, where they are forced to live when all other options are foreclosed, the LA loses that revenue, and most are forced to spend money on cleaning up the place when they leave. So a net loss to most LAs therefore. Legal pitches turn out better even from a financial pov.
Traveller children are usually taken out of school as the age of c 14 is considered the advent of adulthood and time to start being trained to be an adult member of the Traveller community. Boys usually do an apprenticeship of sorts in whatever trade the family pursues (family meaning the whole family here; women as well as men play a part in keeping the family afloat financially) while the girls also have domestic duties to learn on top of whatever part they will play in the family trade.
This is a very old fashioned way of doing things of course. In my own (non-Traveller) family, on my mother's side my grandfather was the last generation to leave school at 14 -- he moved in with his childless aunt and uncle and learned the ropes of farming (i.e. worked dawn to dusk on the farm 365 days a year) thus avoiding the emigrant ship to Australia where most of his brothers and sisters had gone when they had turned 14-15-16, or to Liverpool where he had an older brother. On my dad's side, my aunts were sent to boarding school for a few years after 'home-schooling' with the governess for the primary years, and then on to finishing school for a year or two. In total they probably spent no more than 6 years maximum in formal education.
I don't know what sort of compromise you might suggest to the Travellers. As for going ahead without pp -- that works for them in the vast majority of cases where they wish to establish residence. They had no reason to believe, going on past experience, that it would not work in Dale Farm.