LONDON — Commitments made by the British government in last year's strategic defense and security review (SDSR) might have to be revisited if predictions of economic growth prove optimistic, one of the country's top analysts will say in a study due to be released Friday.

Were current economic growth predictions to prove overly optimistic it might trigger a new government-wide spending review with some of the "more generous 2015 SDSR commitments open to re-examination," Malcolm Chalmers, the deputy director general of the Royal United Services Institute think tank in London will say in a briefing paper that looks at defense and security budgets across government.

"It has not been easy for the Treasury to afford this settlement [on defense and security spending] while maintaining its commitment to a balanced budget by the end of the decade. The economic assumptions on which the 2015 Spending Review is based — most notably an average rate of productivity growth of 2.0 percent per annum over the next four years, after almost a decade of zero growth — remain questionable," he said.

Ministry of Defence (MoD) baseline spending is this year set at £34.3 billion (US $49.5 billion) but that is planned to grow to almost £38.1 billion by the 2019/20 financial year.

Core spending by the MoD is expected to see a 3.1 percent real terms increase in the four years up to financial year 2019/20 with much of that increase targeted at equipment programs like the P-8 maritime patrol aircraft, F-35B strike aircraft, Ajax armored vehicles and nuclear submarines.

The MoD is also set to receive some 60 percent of a newly created £3.4 billion joint security fund although most of the money from that will not be available for several years. Some of that increase though will be swallowed up by changes to employment costs over the next few years.

Chalmers' remarks come just days after the Office for National Statistics released new figures showing the economic growth here slowed in the first quarter triggered by declines in manufacturing and construction.

The Office of Budget Responsibility has recently revised down its expected annual productivity growth  to 1.8 percent over five years against the government's assumption of 2 percent.

One potential looming threat to the economy is next month's British referendum on whether to exit  the European Union.

Bank of England Governor Mark Carney, waded into the referendum debate May 12, warning Britain could go into recession if it voted to leave.

That would almost certainly trigger a fresh look at Government budgets, including defense.

Current commitments to spend 2 percent of gross domestic product on defense "are likely to be seen as a ceiling , not a floor" if budgets need to be re-examined, Chalmers said.

One industry executive, who asked not to be named, agreed with Chalmers, but said the MoD and the government would resist a revisit of spending figures .

Last year's spending review effectively added defense to the already fenced-off budgets of health, education and overseas aid.

"It will depend on just how far the economy under performs in the next two years," said the executive.

"My view is the economy is not growing at anything like the rate it needs to do to support Britain's  projected force structure. The key remains though whether future requirements can be funded out of  MoD savings," said the executive.

Spending plans have called for MoD savings of some £9.2 billion over the five years to 2020 but the Conservative Government pledged that the money can be reinvested in defense rather than being handed back to the Treasury.

Saving's to the tune of around £2 billion are expected to come from deletion of lower priority items from forward plans. Of the remaining £7 billion about a third will come from equipment procurement and support efficiencies .

Other spending cuts are expected to come from reductions in civilian employment numbers, reductions from estate management and efficiency measures identified by the front line commands, said Chalmers.

The RUSI analyst warned though that one of the toughest areas of achieving efficiency savings could revolve around the decision to cap pay increases for the military and civilian staff to 1 percent a year.

That could impact the retention and recruitment of key personnel like pilots, engineers and IT specialist, said Chalmers

The Royal Navy and other commands already has often severe recruitment pinch points.

Andrew Chuter is the United Kingdom correspondent for Defense News.

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