The revelation that the Core Cities plan to resign en masse from the LGA this week – straight after the association had the top slice funding rug pulled from under its feet in the budget – is not so much a financial blow as a political one.

With a year's notice before they can actually quit, the statement from the Core Cities makes it clear this is not a foregone conclusion, and they are up for negotiation.

The Core Cities have made it very clear that they are a special case. They are critical to economic growth. They are boosting the economy and creating jobs. And they have the ear of central government, with or without an association.

It's true they are the big fish – but for me this sounds like the cities holding the rest of local government to ransom. Do what we want or we are taking our ball home.

Are the core cities any more special than the London boroughs or the counties? Do districts not have strength in their numbers?

Let's not kid ourselves that the LGA is perfect. It needs to modernise in line with local government, and it needs to be fit for purpose, not just now but in the future  – whatever it decides its key purpose will be.

With a £3.5m cut to budget – or more than £4m if the cities withdraw – it will need to think carefully about what it plans to do, putting it in much the same position as the rest of local government.

But do we really go back to the days of split associations, with a different voice for each different interest group? I would suggest not – it would give the government the perfect chance to divide and rule.

What stymies the LGA is that it must be all things to all people – but without it, local government is less of a sector, and more of a collection of localities. The core cities should be using their might to strengthen the voice of the sector, not ripping it apart.

I am confident the LGA will come out of this stronger, and with a clearer purpose. What remains to be seen, however, is exactly how gracious a host Manchester will be to the annual conference in July.