National secretary Steve Jary said: “The Ministry of Defence’s claim to have balanced its books does not stack up. It is smoke and mirrors.

“MOD has said it has balanced its books for nearly a year. Why should we believe it will be different this time? Philip Hammond’s statement today fails to identify which parts of the equipment programme are to be dropped. Yet, apparently, nothing has changed since last year.

“It seems that the Secretary of State has been persuaded to maintain the ‘wish-lists’ and unfunded aspirations of the service chiefs: the fuel for what Bernard Gray called the MOD’s conspiracy of optimism.

“The wish-lists cost money and tie-up people in the development of proposals which, if Hammond is to be believed, will never see the light of day. MOD has delayed its cull of procurement specialists until it knows which programmes are to be dropped. It now appears that it will have to make the cuts while maintaining outputs.

“Without cuts to major elements of the equipment programme, once those jobs have gone there will not be sufficient in-house capability to deliver that equipment. This will mean increased costs, delays and new risks to our armed forces as their safety and security is compromised.

“MOD must now come clean and reveal how it ‘balanced the books’ and at what cost to the defence of the UK.

“The true cost is that specialist civilian staff are leaving the department in thousands, thus further denuding MOD of the skills it needs and that in turn threatens the future capability of the armed forces,” said Jary.