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I mean, they don't have planning permission, but they look like they'd have been given it had anyone bothered to ask...
I'd presume he's tried getting retrospective permission, which is an option if you've built something without permission, and been denied it. So if he had originally asked, he would have got a no.
However, I agree. Knocking them down - which will now almost certainly happen - is a massive waste of resources and environmentally dreadful. It would be much better if they could work something out but knocking down properties in this scenario is as much a deterrent to others as anything else.
Part of me think that if the flats are built to standard - and there's no indication that they aren't - that it's wasteful to knock them down. Maybe the council could offer him a deal to transfer ownership as part of the fine (I'm sure they're worth more than the fine, but could be cash too). That would mean he's punished for taking the piss, but that we don't have to go through the palaver of knocking them down and rebuilding them. I mean, they don't have planning permission, but they look like they'd have been given it had anyone bothered to ask...