Sedgefield Town Council has become the first in the North-East, and one of the first in the country, to achieve Quality Council status.
Quality Councils were introduced last year as part of the Government's drive to modernise local government and ensure that all local authorities are in touch with the communities they serve.
The town council had to pass several quality tests to meet the strict criteria, and will hold the status for four years.
Council leader Councillor John Robinson said: "This is a tremendous achievement for all involved and would not have been possible without the inspiration and hard work of our members and staff.
"The town clerk, Lesley Swinbank, has shown considerable foresight by implementing the quality status ideas over the past few years.
"We now hope to build on these and continue not only to provide excellent services, but also to encourage more of our residents to join our working parties and become more involved."
The council had to demonstrate effective communication with Sedgefield residents, publish an annual report, prepare accounts, adopt a code of conduct and involve the public in meetings and forums.
Mayor Linda Maddison said: "We are very proud and delighted to be awarded this, particularly since we are amongst the first in the country."
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