I would report them as it is neglect, when social services get involved in a case like this they will endevour to do what is right for the family and this would mean short tearm foster care for the children and then they can help the parents get back on there feet, they may do this by offering family support first which entails seeking out employment and re training if needed and also and counsilig if alcohol and drugs are an issue, the parents will still have contact with the children and then whilst getting help with employment they will be given help to find a suitable home and financial guidence (this will come with parenting classes) the care they recieve will be ongoing to bring the children back into the family only when safe to do so and will continue after wards. so you wont just be helping the children but the whole family. And your concerns will remain annonymous to the parents and children as everything is delt with confidentially.
Its a sad situation to be in and we cant 100% garuntee how the social services will deal with it that is just the rough guidelines that are usually followed in these situatons. as long as you know you are trying to do the best for the children then you know you are doing a good thing, I only wish there where more people brave enough to stand up against all forms of abuse.
hope this has helped a little and all goes well
Pam x
P.s as others have said you can confront her yourself but persoally i wouldnt because the type of situation that it is you may find yourself on the wrong side of a confrontation and you dont know how that will effect the kids, going to social services will ensure that they will get family support as that is all they might need and the children may not even get taken off them as social services now prefere to leave the children with the parent if it can be helped and the main priority of the social services will become rehousing and parenting classes
Pam x