Harrogate Borough Council has unanimously agreed to increase council tax by more than 2 per cent to battle reducing Government grants.
The increase, which was unanimously agreed at a Full Council meeting on Wednesday, will mean Band D properties will pay an extra £5 per year.
The council explained that since the 2010 Comprehensive Spending Review, its general allocation has reduced by £6.9m (69 per cent) and overall net expenditure by £7.2m (29 per cent).
Despite external cost pressures and reducing Government grants, the council said they been able to produce a balanced budget with no cuts in front line services.
Coun Richard Cooper said that the council has also identified £1.2m in savings and new income as well as the £2.6m it has identified for the 2016/17 financial year.
He said: "Harrogate has not been immune to cuts in central government funding, but despite this we are managing to maintain our valued frontline services.
"We have created a strong, robust budget, which has received support from all political parties, and which will allow us to continue to provide the services which matter to the community.
"This is no mean feat in the current age of austerity.
“We do not increase council tax lightly. For six years, between 2010 and 2016, we managed to freeze the Harrogate borough element and when we do have to make increases, we will keep them as low as possible."
The rise amounts to less than 10 pence per week on a Band D property, but Coun Cooper said the increase would allow the council to continue providing the "high levels of service expected by our residents".
Included in the budget was also £800,000 in community grant funding as well as £30,000 of funding for the Harrogate Homeless Project.
Coun Cooper also highlighted that money was being set aside for progressing the work on the new Ripon swimming pool and growing the housing stock.
“We can no longer rely on future central government funding and must find alternative ways of funding the work that we do," Coun Cooper said.
"This is not simply about how we can make further savings; it is also about how we can generate more income to ensure that council tax rises only take place when it is absolutely necessary.
“We are undertaking new commercial projects and have and have a strategy to reduce costs by moving more services online.
"In addition, this spring the council is moving to a new civic centre, which will generate significant efficiency savings.
“I believe we have created a budget which is right for the council and right for the tax payer.”
Coun Pat Marsh, leader of the Lib Dems, seconded the proposed budget but criticised the Government's handling of Local Government finances.
She said: "Changes are being notified in late December and are still not ratified which makes it very difficult to produce a balanced budget, but this has been achieved by Harrogate Borough Council officers and they have to be commended in doing this.
“There has been little room for manoeuvre or for the setting of an alternative budget, however our request to maintain the parish grass cutting grants and concessions for pensioners for our pest control services, amongst other requests, have all been accepted into the budget
"Our request to prioritise the setting up of a Housing Trust is very important - Housing and Homelessness are major issues for many people in our district and this does need urgent attention.
“Working cooperatively as a council during the budget process in these austere times means that front line services have been protected and we will always make that a priority.
"As a council we must remain focused on what we are elected for and that is to serve all our residents, hopefully this budget will reflect that.”