It's hard to see how such an exclusion could be justified. The council is considering giving public money to some other organisation, and that certainly seems to be something the public are entitled to know about.
Public exclusion requires a specific motion to be passed, and this should give a reason, at least in general terms. By their nature, grants do not normally involve confidential internal information, such as staff matters. Nor do they involve a legal dispute. So, of the common reasons for exclusion, only confidentiality remains.
In most cases, the information required for a grant application is also available to the public. Again, it's very hard to see that the fact of a grant application should be kept secret. In the unusual case where some supporting information is confidential, it would be sufficient to keep a relevant document confidential and avoid direct reference to its contents.
Personally, I've never known a council exclude the public for this particular purpose, maybe others have justifiable examples.