Sutton Council has been given an "improving strongly" status by the Audit Commission.
The report also awarded the council with a four-star status for the third year in a row.
"Sutton has achieved excellent scores for the last three years but this is the best ever. Faced with a totally inadequate government grant for 2008/09 our efficient and hard-working staff will face the challenge of continuing to improve the council's high standard of services," said leader of the council Sean Brennan.
The council said the commission's indicators showed parking complaints, crime and fear of crime have all reduced.
Scores also showed that residents are getting more involved with the council through new local committees, fewer vacancies in children's social care staff, more opportunities for employment for people with learning disabilities and better access to information.
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