A Conservative-run local authority in west London is to cut its council tax bills by nearly 4% next year.
Hammersmith and Fulham Council said it was partly due to merging some services with neighbouring boroughs Kensington and Chelsea and Westminster.
Stephen Greenhalgh, who also announced on Monday that he was standing down as council leader, said it was the fifth drop in six years.
But Labour said tax cuts should not be at the expense of the most vulnerable.
The cut has been attributed to the council working with Westminster City and Royal Borough of Kensington and Chelsea (RBKC) councils, both Conservative-run authorities, on services including adult social care, children's services and libraries.
Hammersmith and Fulham Council - which already shares a chief executive with RBKC - expects to reduce management and overhead costs by 50%.
Councillors have already approved cutting 700 jobs over three years, 175 of which are senior managers.
The council has also announced plans to sell eight of its properties in the hope of raising £14m to help pay off its £133m debt.
Stephen Greenhalgh, who has been council leader since 2006, said: "Whilst the cost of living continues to rise, we are proud to be putting money back in the wallets of our local taxpayers and we are proud to be protecting frontline services."
But Labour MP for Hammersmith Andy Slaughter said: "Everyone would like to pay less council tax. The problem in Hammersmith and Fulham is that if they do go ahead with this it will be painful with some of the harshest cuts in local government."
He questioned Mr Greenhalgh's legacy, criticising the "disposal of public assets" and "over-development" in the borough.
Hammersmith and Fulham Council said Mr Greenhalgh would be helping to pioneer plans for a neighbourhood forum in White City.
Next year's average Band D council tax bill is set to be £781.34, without the London Mayor's precept, a reduction of £30.44 on 2011/12 levels.
The planned cut of 3.75% still needs to be ratified by the full council in February.