READING'S council tax is set to be frozen for the second year running.

The Department for Communities and Local Government announced today that Reading Borough Council will receive �1.735m if it freezes council tax in 2012-13.

The handout is the same as that given to the local authority in return for a freeze in the current financial year and is equivalent to a rise of nearly 3%.

Council leader Jo Lovelock said it would be stupid not to take the Government up on its offer but stressed overall funding for the town will continue to fall.

Cllr Lovelock confirmed the Labour administration will include the freeze in its budget when it comes before the council in February, and added: "It is good for residents but it has got to be put into context that the council's overall budget will have seen a huge net reduction by the end of 2013.

"The Government talks a lot about local decision making and localism but they are actually dictating this very much from the centre and not giving us any local flexibility."

Cllr Lovelock highlighted how Reading lost around �9m in Government grants for 2011-12 and will lose a further �14.5m in 2012-13, compared to 2010-11.

She added: "The only offsetting has been this council tax freeze money. We keep working on efficiency savings and all these things that you would expect but it makes it more and more difficult, with fewer and fewer staff having to do more and more to make up for these sort of funding gaps."

The Labour leader also accused the Coalition Government of penalising Reading at the expense of more "affluent" boroughs.

Neighbouring Wokingham saw its 2011-12 funding cut by the equivalent of �4 per head - compared to �40 per head in Reading.

Lib Dem leader Cllr Daisy Benson, describing the handout as "welcome news for hard pressed residents", added: "Council tax rises hit people on low and fixed incomes disproportionately."