The chancellor outlined plans to boost the incomes of low-income families by disregarding child benefit payments when calculating council tax and housing benefit.
The move, taking effect in October 2009, should see a working family with one child gaining up to£17 each week.
Sir Jeremy Beecham (Lab), vice-chairman of the Local Government Association , said that more still could be done to help the poorest in society - who fail to claim£1.8bn of benefit annually - to pay council tax.
"Reform of council tax benefit would be a huge step towards hitting targets on child poverty. This is a positive move, but there are further proposals that councils could work with the government on to improve take-up,” he said.
"The whole system desperately needs simplifying and the financial limits on eligibility need to be increased to allow more people to benefit.
Mr Darling also restated the government’s commitment to eradicating child poverty by 2020. Among his additional proposals was the energy companies tripling their social tariffs to£150m annually to support five million customers on prepayment meters.
Paul Bettison (Con), chairman of the LGA’s environment board, said: “The LGA believes more needs to be done if we are to encourage householders to cut their carbon footprint and help lift people out of fuel poverty.”
He said a recent LGA plan to reduce fuel dependency by better insulating homes could have reduced dependency on hand outs by permanently reducing fuel bills. The LGA proposed energy companies paying the same as customers to fund a national insulation programme.
Meanwhile, Hilary Fisher, director of the Campaign to End Child Poverty, was upbeat. She said: “In such a tight spending round, is it is reassuring to see the government is still serious about lifting children out of poverty.”