HMS Sutherland
A view shows the front deck of the HMS Sutherland, a frigate of the British Royal Navy, at Mina Zayed port in Abu Dhabi. The Armed Forces are reportedly facing budget cuts Reuters

Despite a government commitment to more funding, Britain's Armed Forces are getting ready for defence cuts, it has been reported.

Defence chiefs will strive to make savings, hit by a double whammy of a falling pound and the defence budget needing to be spread more thinly as the Strategic Defence and Security Review (SDSR), which set funding for the next few years, may have to be reexamined.

"The problem is the SDSR wasn't really properly funded for the first couple of years. The other problem is that there were so many other things rolled into the two per cent that didn't used to be there before," A source told the Telegraph, referring to the pledge to spend 2% of GDP on defence to honour the UK's Nato's commitment, an amount which now includes pensions and UN peacekeeping.

"On top of that, the Treasury demanded efficiencies and then when we have to make those efficiencies, it's very painful. There are going to be some very tough decisions in the next two or three months," the source told the paper.

Deputy Director-General of the Royal United Services Institute, Malcolm Chalmers said the defence budget would not go up for several years and that the falling pound would hinder purchases of US equipment like F-35 stealth fighters, P-8 submarine-hunting maritime patrol planes and drones.

"The number of major purchases in the United States in particular is clearly creating problems. It feels to me as though there would be pressure to push procurement back a bit," The Telegraph reported.

In November, the MOD said it would sell of parts of its estate and that the Army, Navy and RAF would have to leave a number of bases. Other cuts over recent months include the Navy losing anti-shipping missiles and its repair ship.

However an MoD spokesman said: "We spend more on defence than any other country in Europe, exceed Nato's two per cent target and have a budget set to hit £40bn a year by the end of the Parliament as we invest £178bn in equipment over the next decade."