George Osborne has announced that he is hoping to extend the current council tax freeze until 2013.
The government cannot force councils to freeze bills but it is offering to give those councils that don't raise council tax the money to cover the move. Money will also be offered to the Scottish and Welsh administrations, which will then choose whether to use it to freeze council tax.
The Chancellor will fund the £805 million move with money saved due to increased efficiency in Whitehall.
He told the Today programme that halfway through this financial year it became apparent that Whitehall departments were going to spend "a little way short" of their £350 million budget.
"This is often the case but sometimes government has just sat on that money because it hasn't mattered so much. I think at times like this if we've got anything to spare, we should spend it."
While any move to ease financial pressure on families is welcome, Labour's shadow Treasury minister Chris Leslie has been quick to point out the move will save the average family just £72 a year.