To start with, I'll ask are you looking at google.com or google.co.uk? At first, I just assumed it was google.com, which shows me local results for Worcester, Massachusetts. However, I then saw that your site is hosted in the UK, and I needed to go over to google.co.uk to generate local results for Worcester, England.
Since others have commented on the off-page elements, I'll point out a few things I noticed related to on-page optimization:
1.) The primary keyword you mentioned of course makes your domain an exact match domain, and the influence that those have in search rankings has of course fluctuated quite a bit over time (see http://mozcast.com/metrics, click on "EMD Influence") but on the whole, has diminished and doesn't nearly serve the advantage it used to.
2.) Looking at the pages currently ranking for [driving lessons worcester], they all appear to be very locally relevant companies based in Worcester (applies both to Massachusetts and England). The first page even has map results. Your site doesn't appear to have any locally relevant information, or a local address, phone number, etc. It appears that Google made up it's mind that local businesses should get the upper hand on this query. If you are in fact based in Worcester, I would highly recommend adding your name, address and phone number to the footer and a contact page, adding local schema markup, gathering locally relevant links, etc.
3.) Only your homepage seems to be optimized and it is only for that one keyword. The rest of the pages appear to pull in "Driving Lessons Worcester" as a default ending to the title tag, which just results in every page having that keyword make up the majority of the title tags. If you flip through the site search results for your site, you can quickly see why Google might devalue your site for that keyword. I would go through and optimize other pages of your site for longtail variations and other keywords, and get rid of that default title tag ending. In short, Google probably sees your entire site as trying wayyy to hard to rank for a single keyword, which may have raised a flag.
I hope that helps!