Worcestershire County Council is one of the most improved authorities in the country, according to the Audit Commission.
Its performance has increased by nine points and is rated as excellent.
Worcestershire is now joint third county in the country, level with Hampshire and Dorset, and bettered only by Derbyshire and Dorset.
Council leader George Lord said: "This is great news for Worcestershire.
"That we have been rated excellent is down to the hard work of all staff and councillors of all parties, who have voted unanimously for the budgets that have allowed us to get to this stage."
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