Defence: 'one of the more vulnerable areas'
Updated on 11 December 2009
With the government forced to make big, and as-yet-unspecified, cuts in public spending in the near future, defence spending could face a tight squeeze.
The Ministry of Defence is having to make hundreds of millions of pounds-worth of cuts, including the closure of at least one RAF base, to balance the books after an overspend.
The pre-budget report earlier this week announced the government would protect spending in certain areas, including schools and hospitals, but paved the way for deep cuts in non-protected areas in the future.
Independent think tank the Institute for Fiscal Studies calculated yesterday that cuts of 16 per cent would have to be found in areas including defence, transport, higher education and housing between 2011 to 2014.
"Defence is one of the biggest areas of government spending where there hasn't been a commitment from the government - or indeed the Conservatives - that it should be protected from cuts," Carl Emmerson, deputy director of the IFS, said today.
"With that in mind, perhaps it's not surprising that the government's looking to make savings there.
"It looks like one of the more vulnerable areas, alongside areas such as housing and transport, where perhaps the axe is also likely to fall."
Today's news that the MoD is making cuts is a further sign of how tight things could be in the future.
"If the MoD is already finding it hard to live within its means in the current year, that suggests that they might find it particularly difficult to live within reduced means in, say, two or three years time, by when spending somewhere has to be cut dramatically," said Emmerson.
"That suggests that either the commitments defence has have to be scaled back, or alternatively the cuts can't be made in defence, and they'll to be even deeper elsewhere."
"The chancellor continues to assert that we can't have a full spending review, that we can't say exactly how much every spending department will have to spend over the next two or three years because the economic environment is too uncertain.
"The environment is uncertain, but that doesn't seem to stop him from saying, 'I'll protect 95 per cent of the NHS budget, I'll increase school spending'. So he feels able to make those commitments to the things he wants to increase, but he doesn't seem able to spell out the numbers of exactly where he will cut spending. I think it would be good to have both sets of numbers based on our best guess at the moment, and of course they can always be revised, if things do turn out different to what we expect."
