Council tax will fall for the third year running in Hammersmith and Fulham, sparking fears that services will suffer.
After the cut was announced on Tuesday, Peterborough Road Residents' Association's chair-woman Anne Rosenburg slated the decision.
She said: "Cutting council tax doesn't compensate for the loss of services for the less well-off, like meals on wheels."
Leader of the borough's Labour party Cllr Stephen Cowan accused H&F Council of charging for services to pay for the cut.
He added: "The Tories are trying to argue that there is such a thing as a free lunch, but they are introducing stealth taxes with charges for things like meals on wheels and garden waste. They are cutting services instead of cutting waste."
Council leader Stephen Greenhalgh said the council was 'taking a lead for Britain' with the reduction.
He added: "It is essential councils like ours do all we can to help hard-working families struggling to make ends meet, whilst ensuring we still deliver quality services."
One saving in costs the council plans is to move its contact centre to Rochdale in Greater Manchester.
Unison convenor Krissy O'Hagan spoke out against the decision which was made in Monday's cabinet meeting at Hammersmith Town Hall in King Street, Hammersmith.
"They say they are saving money but they won't let us have the figures. No-one wants to move to Rochdale," she said after the meeting.
Cabinet member for residents' services Cllr Paul Bristow said: "While it is true that we are committed to treating our contact centre staff fairly and are offering them the chance to be redeployed in a different job within the council, our number-one priority must be to deliver top-quality, value for money services to residents."