How are arguments over funding secondary? Even in countries with far worse economies than ours, many have tried to mitigate the economic impact to some extent by government backed handouts, at least in part due to the knowledge that lockdowns won't necessarily work if people are starving/ worried about paying their mortgage or rent.
Not to mention that, even if that line of argument is true, the Tories have seemingly offered less than what they were offering previously. So one has to assume that what they were offering previously is what they deemed to be what Manchester needed. They're not punishing Burnham by reducing the amount, they're punishing the citizens of Manchester.