The Daily Mail gives a lot more detail.
www.dailymail.co.uk/news/article-1348564/British-mothers-toddlers-banned-council-funded-playgroup-immigrants.html
It looks like government ministers think this is not right
"Ministers said the group was ?divisive? and ?racist?.
Last night the Department of Communities and Local Government announced it would effectively abolish it by cutting its public funding.
Communities and local government minister Bob Neill said: ?It is a real cause for concern that monies allocated for community development are being spent in such a divisive manner.
?Rather than building good community relations, such an insensitive approach that seemingly discriminates against British people threatens to undermine community cohesion.?
Justice minister Jonathan Djanogly, whose Huntingdon constituency includes St Neots, added: ?I?m upset to hear that constituents have had a racist experience. There is a question here of legality and also of sensitivity. Teaching people how to integrate involves allowing people to integrate.?"
The Cambridge article says
"Making Links was set up in 2007 and more than 70 women from 30 different nationalities attend."
It looks like it was set up in the Labour period.