Demolish and build again from scratch...
So what do you propose to do with these people who will be made homeless while you rebuild the estate? All you'll be doing is moving the so called 'scum' (which is basically what you're calling the majority of people who live in council estates in your final paragraph) to another area of a city or town, and going by the tone of what you're saying, they'll just wreck that area too prior to wrecking the area that's been rebuilt when they move back there.
Also, to counter your point about those that don't/ won't work living in council estates, I think you'll find that after Maggie Thatcher's 'right to buy' scheme in the '80's, there is now a real lack of social housing provided by councils, why do you think this government and the previous one, wanted to kick start the construction industry in this country by building more social housing. While the governments of this country allowed their housing costs to be paid for by the state, you'll find that a lot of those who don't/ won't work are living in houses/ flats owned by private landlords.
The degredation of the old council estates goes hand in hand, once the majority of people who lived there bought their council houses, the councils almost left them to maintain the estates themselves, grass cutting, housing maintenance etc are cut to a minimum. The very nature of today's world means that a lot of people don't have the time or inclination after a long working day/ week to bother with gardening and painting doors/ windows/ brickwork etc.
I'm not excusing them, it's just a fact of life, humans are turning into sedentary animals, how else do you explain people sitting for hours and hours in front of a tv every night of their lives, watching the latest rubbish that simon cowell puts on saying that it's the best thing you've ever seen and you must buy their single/ album/ dvd (to make him even more money that he doesn't need), kids don't go out to play, they'd rather sit in front of a tv or an xbox or playstation or pc/ laptop.
I don't like having a go at people, as I tend to regret it at a later date, but to me, you need to stop looking down on everyone else who is in a less fortunate position in life to you. Posh doesn't mean better, after all, we're all wormfood eventually!