The nasty ignorance from privilege in some of these replies is awful.
Yes, asking for a guarantor has become bog standard for rentals in parts of the country (UK) now. Along with rocketing rents.
Yes, it's possible to study but be unable to work
Yes, there are parts of the country where work is scarce and/or wages are low. Not everyone has the skills or experience for walking straight into a full-time job. Finding work/better paid work/full time work can take time or training (that several posters consider a luxury!)
In those parts of the country, it can be that almost impossible to find work if suffering health issues so a college course may be a necessity for employment to become an option.
Council areas in Wales can cover a relatively large geographical area - I'd guess in South Wales the neighbouring options are more expensive with more demand. So bidding elsewhere may not help and moving away from any support may not be an option/would take time OP doesn't have.
Perhaps those unfamiliar with South Wales or situations like the OPs should move on to another post? Misinformation, disbelief, and condescension aren't going to help.
OP, you need to get proper advice from Shelter or Llamau (or both) about the threats made to you and your family and what your options might be. Send the council a copy of details of where/when you raised the issue originally (hopefully you did it in writing) and follow the advice from professionals. Avoid mention of hearsay about paedophiles to the council.