Money from health and education budgets could be 'reclassified' to protect defence spending from cuts

Hundreds of millions of pounds from ring-fenced Whitehall health and education budgets could reportedly be “reclassified” to protect Britain’s Armed Forces from the next wave of Treasury spending cuts.

The Defence Secretary Philip Hammond, who has previously championed increased welfare cuts to protect his budgets, is said to have been in talks with the Treasury over proposals to transfer money earmarked for the Department of Health and Department for Education and use “it to ease the impact of cuts on the Ministry of Defence”.

The proposals could see half a billion pounds taken from the protected budgets at the two departments ahead of the next round of Treasury cuts of £11.5bn from unprotected budgets like the MoD, according to The Daily Telegraph.   

Mr Hammond has previously spoken to the media in opposition to spending cuts in his department. He was rebuked by the Chief Secretary to the Treasury Danny Alexander during a weekly private Cabinet meeting for airing “dirty laundry” in public after his comments about welfare cuts in March.

While spending on defence equipment is due to increase in 2015/16, money spent on personnel could reportedly be reduced by up to five per cent as the department attempts to reduce the number of regular soldiers from 102,000 to 82,000 before 2017. Some 5,300 Army redundancies are due to be announced in June to meet what the MoD describes as the “challenges of the future”.

In a formal submission to the Treasury this week, Mr Hammond is expected to argue that “at least” £200m should be taken from NHS budgets and a further £120m from education to prevent further losses. The logic behind the raid would be that the MoD pays hundreds of millions of pounds a year towards the health and education costs of its personnel, it was reported.

“There will be much support on the Conservative benches for these funds to be taken from departments which are ring-fenced rather than the MoD,” Mark Pritchard MP for The Wrekin told the Telegraph. He added: “In an uncertain world there is a strong case for increase in defence spending rather than decrease.”