CUTBACKS could be made to vital services in Worcestershire such as social care, libraries and road maintenance in an effort to save £10 million.

The county council could be forced to scale back some of its key services despite a proposed council tax increase of 4.99 per cent.

The council's grant from the Government for 2006/07 is £69.7 million.

To continue providing the same level of services, the council needs £262.7 million and a 4.99 per cent tax rise will still leave a £8.7 million shortfall.

Reserve cash the authority has kept back in case of such a situation is earmarked to reduce this amount by £5.2 million, leaving a funding black hole of £3.5 million.

Councillors hope this can be plugged by finding more efficiency savings, delivering the same standard of service for less financial outlay.

Council Leader Councillor George Lord said: "The outlook is grim.

''We get top marks from the Audit Commission for value for money, one of only three councils in the country to do so, and we get punished for it by getting less of a grant from the Government. It's disgraceful.

"But whatever we're given, we should make the best of and that's exactly what we'll do."

The council will discuss budget proposals with key partners such as businesses, parish councils and unions.

Cabinet will make its final recommendations on February 10 before full council makes a decision on February 17.