GOVERNMENT action against Surrey Police over the hike in its council tax demands has stopped short of clawing back any money in the current financial year. However, Surrey has still been named as one of seven police authorities that are being penalised for ignoring the government warning that tax rises should be limited to five per cent. The average Surrey taxpayer has been hit with a 9.7 per cent rise in what they pay for police services in the current year, amounting to an extra £16.65 a year. But Waverley council's fear that council tax bills might have to be reissued in a costly exercise has not come to fruition and Surrey Police Authority has been allowed to keep the £191.5m budget that it has set for 2008/9. The three year policing budget for Surrey is being capped, however, with restrictions taking effect next year. Any increase in next year's budget will need to be based on the figure of £189.6m – the amount it would have been based on if the policy authority had observed the five per cent limit this year.  Local government minister John Healey announced on Friday that the Government intends to 'nominate' Surrey Police Authority for the period 2008-09. "The Government is sending out a clear message to all authorities – if you set an excessive increase in council tax, you can expect tough action from us to protect taxpayers," Mr Healey said. Mark Rowley, temporary Chief Constable of Surrey, warned, in April, that frontline jobs and operations to halt London criminals flooding into the county would both be hit, if the police authority's appeal against capping failed. On Friday, the authority and the force issued a statement saying they will now consider the implications before deciding on a course of action. Peter Williams, chairman of Surrey Police Authority, said: "We are disappointed that the Government has not agreed to our proposals – whilst we have retained this year's budget, we are concerned about the possible impact of longer term restrictions. "This is a serious issue and we will carefully consider what the full impact of the decision is before responding. We are, however, pleased that the Government has now ruled out the possibility of an expensive and counterproductive process of rebilling in Surrey. "We have 21 days to respond to the proposed nomination." Mr Rowley added: "We have maintained that the three year budget put forward by the authority is the best way forward in providing a policing service that puts the Surrey public first, and one which ensures that the force is able to meet the important policing challenges facing Surrey. "We now have £1.9m less than we had planned. This will have significant operational implications and we will work closely with the authority to decide the next stages. "I also feel it is right to note the work of the people and organisations in Surrey who have taken the time to support us throughout this process. Both the force and the authority are keen to underline their tremendous gratitude to them for their efforts." Waverley Conservatives blamed Labour Government funding of Surrey Police – at only one-third per head of what it is for the Metropolitan Police – for the capping. Carole Cockburn, portfolio holder for Safer Waverley on the borough council, remarked: "The poor council tax payer has been picking up much of the cost of running Surrey Police due to inadequate funding from central government." "It is the low grant given to Surrey that has given rise to the large percentage increase in police council tax, and this has now been capped. "I hope this Labour government will now give a fairer settlement to Surrey so that our efficient force can be maintained, and the crime rate in Surrey can remain one of the lowest in England."