More to this story than meets the eye
I certainly can’t assume this is anything but central government maintaining their own funding in the wake of the Brexit vote. After all, if they don’t spend it on local government in the first place, the funds local authorities raise, in this case council tax and business rates, are then plugged by raising funds through direct taxation of those within a local authority catchment. So it becomes the “fault” of the council, not Brexit voters.
Also, this is just one aspect of central government inequity. Early this year the drop in business rates would unfairly impact low rateable value areas like Manchester yet, wouldn’t make a difference to high rateable areas like London. There is an expectation of a shortfall. Pulling up data gathered through the FIA, we get a maximum shortfall of:
Which in and of itself is a big drop in funding. It’ll be interesting to see the actual figures when they’re published.