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Armed forces 'facing £11bn of cuts'
The armed forces could be forced to find cuts of £11 billion over the next decade as a result of Chancellor George Osborne's forthcoming spending review, a defence think-tank has warned.
Professor Malcolm Chalmers, research director at the Royal United Services Institute, said comments made by ministers implied the Ministry of Defence faced another real terms reduction of £1.1 billion in its annual budget. That would leave a shortfall of £11 billion in projected spending over the next 10 years.
"When these decisions were made, it was hoped that four years of austerity would be enough for the Government to meet its wider budget reduction targets," Prof Chalmers said. "These assumptions now appear under threat."
Downing Street has already warned that defence will not be immune from cuts in the spending review for 2015/16 - on top of the 7.5% reduction imposed in the 2010 Strategic Defence and Security Review.
David Cameron has said that he believes spending on defence should start to rise again in real terms in the years following 2015.
However, Prof Chalmers said the position of the MoD was still likely to be "very difficult", with spending on a replacement submarine fleet for the Trident nuclear deterrent due to pick up sharply from 2016/17.
The result would be a "sustained squeeze" on the modernisation of non-nuclear forces unless the Government was prepared to commit to annual real terms increases beyond 2020.
At the same time, he said that the MoD's ambitious equipment plan, announced in January, could mean that non-equipment spending will have to be cut in order to fund it.
Defence Equipment Minister Philip Dunne said the MoD had been given an assurance by the Treasury that the equipment budget would rise by 1% a year in real terms from 2015/16 onwards.
"This has been endorsed by the Prime Minister. Our armed forces will remain a formidable fighting force, backed by the fourth largest defence budget in the world," he said.