A council in Suffolk said it has managed to avoid cuts to services and jobs in its budget for the next financial year.
Conservative-controlled Waveney District Council has also frozen a rise in its council tax to 2.5%.
The councils said it had closed a funding gap of £1.5m by working with agencies and sharing management with a neighbouring council.
The budget was approved by the council but the Labour group abstained.
The council has saved more than £350,000 by transferring more than 100 employees like bin collectors and parks employees to a separate arms-length company.
'New solutions needed'
Waveney Norse, is a subsidiary of a company set up by Norfolk County Council to manage services and facilities for councils across England saving on overhead costs like pensions.
A further £125,000 has been saved through the formation of a new Leisure Trust and a review of procurement has saved £125,000.
The council also decided to share some senior management with Suffolk Coastal saving £400,000.
John Shanahan, leader of the Labour group on the council, said he was concerned that there were no concrete proposals for dealing with a £2.5m deficit facing the council by 2015.
"It's time that we find new solutions to these problems rather than old school Conservative answers that provide no long term vision," he said.
"Waveney District Council has the capacity to provide services to the private sector, for example generating significant income that would mean services are maintained for those that need them most."