COUNCIL tax bills looks set to be frozen for the second consecutive year.

Chancellor George Osborne announced yesterday the Government will spend £800million to allow town halls not to increase the tax.

Councils that do not raise spending in 2012/13 by more than 2.5 per cent will get the equivalent of a 2.5 per cent rise from the Government.

Paul Smith, councillor responsible for finances at Colchester Council, welcomed the news because it had been planned to increase council tax bills by 2.5 per cent next year.

He said: “We had always said we would prefer not to have a tax rise this year.

“But we had put a 2.5 per cent increase in the plans.

“As far as the taxpayers of Colchester are concerned, for the second year in a row there will be no rise in council tax.

“The way it’s been worded indicates next year’s is a one-off measure. But anything that helps us keep the tax down is welcome.”

Mr Smith said he would have to look at the proposals in detail to make sure “it does what it says on the tin”.

The bulk of council tax goes to Essex County Council. Deputy leader David Finch would not be drawn on whether the authority would keep the rise below 2.6 per cent. He said: “We await further details about how this will be funded and its impact on the council’s position.”