This report is by the Royal United Services Institute, an independent think tank. That is to to say, it is not an official government announcement. Perhaps we should delay our head banging until more is known?
Besides, as a MoD spokesman freely admits :...
"not a penny will be cut from the defence budget next year but it is not possible to give a meaningful assessment beyond 2010/11 as future spending plans have not yet been set."
I'm quite sure that in this time scale "this government" will have become "that government" and then we'll see if there are any holy saviours of the armed forces in the blue corner.