More cuts likely for the MOD budget before the year is out

Defence minister Peter Luff
Defence minister Peter Luff
Picture: Malcolm Wells

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The Government will be forced to make further defence cuts beyond those announced late last year.

Defence minister Peter Luff said cuts already chosen in October’s Strategic Defence and Security Review (SDSR) have fallen short of what is needed in the MoD’s April budget.

Spending reductions so far identified fall short of what’s needed for the 12 months beginning in April to balance the ministry’s budget, Luff said in an interview.

‘Perhaps it is our fault for failing to make our position clear. We thought we had told the outside world,’ he said.

‘The big decisions have been taken; the fundamental assumptions won’t be changed, but there were unallocated savings identified which were a matter of public record and which we now have to find.’

The defence ministry has to reduce its budget by eight percent over four years. Plans announced in October included the ordering of fewer, cheaper planes for one new aircraft carrier and the possible mothballing of a second, which will carry only helicopters. HMS Ark Royal and the navy’s Harrier jets were axed three years earlier than previously planned.

The Ministry of Defence revealed last week that 11,000 members of the armed forces will lose their jobs. This is in addition to 25,000 civilian MoD staff.

‘We always said it would take more than two planning rounds to sort out the full financial consequences of the inheritance we had,’ Luff said, citing the £38billion black hole in the defence budget left by the previous Labour administration.

He added: ‘There are a whole stack of options on the table which we are still looking at and I’m not going to rule in or out any one of them.’

Asked if further cuts would add up to £1billion worth of savings or more, Luff replied: ‘It depends on how you define it.’

Mr Luff’s comments came to light as ministers, including defence secretary Liam Fox and foreign secretary William Hague, were being grilled on the SDSR by the the House of Commons Defence Select Committee.