Wednesday Jul 27, 201103:32 PM GMT
UK £10bn deficit spell new defense cuts
Sun Jun 26, 2011 7:40AM
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The British military could be forced to cut even deeper into personnel, aircraft and warship numbers due to a new billions-pound hole in the defense budget.

The Ministry of Defense (MoD) is in need of at least £10 billion to cover its needs, which goes partly beyond the shortage resulting from the implementation of the savings plan based on last year's Strategic Defense and Security Review, the Daily Telegraph reported.

The MoD is in for losing 8 percent of its budget over the coming four years with the 2011 budget standing at £33.8 billion.

The financial black hole will be evident in the budgets after 2015 but the report said if nothing is done to tackle the problem, the ministry should begin cancelling its future plans before that date.

“We are quite close to the point where this will force us to make new cuts,” said a senior defence source.

The £10 billion has been uncovered after the MoD looked into its financial liabilities over the next decade.

A report on the results of the “three month study” on the MoD budget deficit is still a few days away, with chairman of the Commons defence committee James Arbuthnot estimating the figure to stand at the £8 billion level.

Yet MoD sources said the new shortfall is likely to be bigger and “in the tens of billions”.

This comes as MoD sources also said that the deficit is part of the “legacy” of the Labour administrations.

“The financial mess Labour created in the MoD was never going to be solved overnight -- the legacy was always going to take more than one spending round to solve,” sources said.

“The current Government is tackling the issues Labour ignored and refused to face up to. Unless we deal with the historic problems of a mismatch between the defence programme and the budget, defence will never be on a stable footing,” they added.

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