Found this on my local council website - it's not quite what I'd like to see (I'd prefer an attempt at contacting the owner too, and a minimal storage time to allow people to collect their pet) but Well Done Waltham Forest for at least nodding in the direction of humanity. Think I'll drop them a line to suggest this.
Where dead pets are collected, the Council will try and scan the animal to find out if it is microchipped, and retain scanned information and collars for a period after disposal.
All dead animals collected by the Council are incinerated and not stored in any way.