The UK Government agreed funding for Defence of £33.8 billion in 2011-12, £34.4 billion in 2012-13, £34.1 billion in 2013-14 and £33.5 billion in 2014-15.
This settlement represents an eight per cent reduction in real terms.
This agreed funding is part of the Government’s 2010 Spending Review which was recently announced by the Chancellor.
The Spending Review set out to allocate resources to government departments according to the Government’s priorities.
The 2010 Spending Review covers the four years from 2011-12 to 2014-15.
The Spending Review has been run concurrently with the Strategic Defence and Security Review (SDSR), bringing defence plans, commitments and resources into balance to create a coherent defence capability and a sustainable defence program for the future.
At least £4.3 billion of savings will be made in non-frontline activities over the Spending Review period.
The MoD’s administration costs will also reduce by 33 per cent over the period.
“The SDSR has reshaped our Armed Forces to tackle future and emerging threats,” Defence Secretary Dr Liam Fox said.
“We now also know how much money we will have to carry out the vital job of protecting Britain’s national security.
“This will enable us to bring defence policy, plans, commitments and resources into balance so that we can emerge with a coherent and affordable defence program for the future.”