Osborne agrees defence spending deal with Hammond

Summary: Chancellor George Osborne has said he has reached a deal with the Ministry of Defence in budget talks on 2015-16 military spending, saying that cuts are necessary but military capacity will not be affected.

The Chancellor said that he and Defence Secretary Philip Hammond came to a joint agreement on spending. Mr Osborne said the agreement will mean renegotiations with equipment suppliers and cuts to civilian staff, which includes Royal Fleet Auxiliary and MOD scientists.

Mr Osborne has not revealed how much money had been saved from the defense budget. As of June 14, he had found 3.6 billion pounds of the savings required from all departments.

A Spending Review announcement is due this week (Thursday 26), where Mr Osborne is expected to outline a further £11.5 billion across all Whitehall departments.

Mr Osborne said: “I’ve settled with the defence department. Many people thought that was going to be one of the biggest challenges. The civilian head count is going to be reduced. There will not be a reduction in military capability.”

More details on this issue are due to be released this week in the full Spending Review.


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