Defence unfairly penalised
The most scandalous aspect of the defence cutbacks expected over the next 5 years is that defence spending didn't benefit from the splurge of increased spending during the public sector boom years '00-'07, but is expected to play full part in the cutbacks that are the consequences.
All sorts of capabilities and skills are likely to be lost if the some of the predictions come true. A key culprit is the escalation in the costs of military development programs, and the inability of small buyers like the UK to exploit significant economies of scale, such as those enjoyed by US, and Euro projects. We are moving through 'smart procurement', that's now too expensive, to a situation where the only economically viable route is to let industry develop concepts on its own (e.g. Mantis, Talarion ..), and buy Off the shelf. But, what sort of 'cutting-edge' will our troops get if it's left to the defence equipment market?