East Riding Council says it's seen a five and half million pound improvement in this year's budget.
In September the authority warned of a "severe" financial situation as a result of higher than expected inflation, wage increases and spiralling adult social care costs.
Updating councillors this week, Director of Finance - Julian Neilson - said the situation has improved over the last three months.
Despite the improvement the finance boss warns that the council is still on track to record an overspend of nearly £13m this year.
Director of Finance - Julian Neilson - says local authorities across the country are struggling with inflation and increased demand for social care.
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