At least in this case the money is moving from the council back to the central government. If you think making this point is useless, consider these two councils:
"In one case, Islington Council not only issued a parking ticket to itself, but then pursued itself at the Parking Adjudicator and then asked for costs against itself. "
http://www.timesonline.co.uk/tol/money/consumer_affairs/arti...
And
"SOLICITORS working for Aberdeen City Council have been told the authority will be able to go ahead with legal action against itself over the closure of a city homeless hostel."
http://www.pressandjournal.co.uk/Article.aspx/1577294