WORCESTER City Council leader Robert Rowden hailed the Conservatives' success last night - but warned that cutbacks could be on the way.

He said the one per cent increase in National Insurance, announced in the Budget, contributions would affect the council's spending next year.

Coun Rowden said the new tax would affect the council like every other employer.

"We've budgeted for this year, and we will have to cut back through efficiency savings," he said. "We will cut back on waste and offer value for money."

He said the party was looking further ahead as well, with plans to improve the Worcester to Birmingham rail link and the link to the South West.

"We need to be on a main railway line," he said.

The evening became steadily worse for Labour after a promising start.

Coun David Barlow was the first winner on the night, and claimed his victory was an endorsement of Labour Party politics in the city.

Coun Ray Turner then held on to the party's seat in St Nicholas, but a massive win for Conservative Coun Aubrey Tarbuck in St Peter's ward was a sign of things to come.

June Tyler's St Martin seat was the first casualty, closely followed by the St Clement seat vacated by Brenda Sheridan.

The final result of the night, following a recount, gave the Tories their third gain as Mohammed Altaf triumphed over Labour's Nazrul Islam. His win was greeted by cheers from a large Asian following at the Guildhall.

"Our target was four and we got three," said Coun Rowden. "We've got half the seats on the council, and Labour are down to 12. It's a big change."

Labour leader Coun Adrian Gregson put on a brave face, pointing out that the party had won more seats than at the previous election. He said the votes in Nunnery and St Nicholas had been close, and their vote in St John's had gone up.

But he criticised the voting procedure in St Clement, where 34 votes had been rejected. Labour's Andrew Watson lost to Tory Barry MacKenzie-Williams by just five votes in the ward.

"Thirty-four voters lost their right to vote through administration errors. It's quite wrong, and needs to be looked at," he said.

The Labour leader also paid tribute to the party's outgoing councillors, June Tyler and Nazrul Islam.

"June has worked very hard for the ward and the council," he said. "She will be a sad loss. Nazrul has also worked very hard. He's young and enthusiastic. It's very disappointing and I'm sad about it."