The Treasury has signalled there is no new money for defence despite recognising the urgent need to rearm in the wake of Russia’s war in Ukraine, defence sources have said.

At the same time, the sources said a “refresh” of UK defence policy – that was meant to inform the spending plans of Chancellor Jeremy Hunt and Prime Minister Rishi Sunak – could be delayed until after the March budget because an initial draft failed to reflect sufficiently the transformed security environment in Europe, where a land war is raging.

“It is not very joined up government,” according to one source, who was speaking on condition of anonymity to discuss sensitive information.

The comments came after Sky News last week revealed that a senior US general had told Defence Secretary Ben Wallace that the British Army is no longer regarded as a top level, or “tier one”, fighting force following decades of cuts to its size and strength.

Now, defence sources are warning that Britain will be unable “credibly” to offer as many troops as NATO allies would expect to a major new force structure that is being drawn up by the alliance to bolster its defences in response to the war in Ukraine.

This would only change if Mr Sunak accelerated plans to fix the army’s decline, they said.

A senior European diplomatic source confirmed that the UK “is under-delivering”.

Lord George Robertson, the last British secretary general of NATO, said he was concerned that the government did not fully appreciate the threat posed by Moscow and urged Mr Sunak to act as a “wartime prime minister”.

“The prime minister needs to wake up to the fact that Vladimir Putin has declared war on the West and we are the second military power in the West and we’ve got to live up now to the challenge that he [Mr Sunak] faces,” Lord Robertson told Sky News in an interview.

“That means by taking defence and security more seriously than it appears at the present moment and investing in the right kind of equipment, the right kind of capabilities in order to keep the country safe.”

‘Treasury playing hard ball’

Defence sources had already urged the government to increase the defence budget by at least £3bn a year; halt a plan to shrink the size of the army even further; and ease peacetime procurement rules that obstruct the UK’s ability to buy weapons at speed.

But the same sources this weekend said Mr Hunt and the Treasury were “playing a dead bat”.

“We know that at the moment the Treasury and the chancellor are playing hard ball,” one source said.

“They recognise the threats. They recognise the pressure defence is under from inflation, the nuclear deterrent, stockpiles and Ukraine. But despite recognising the threats and the pressure, they say there is no more money.”

The source was referring to how inflation is eroding the value in real terms of an extra £16bn that the Treasury, then led by Mr Sunak, committed to the Ministry of Defence in 2020 across four years in the biggest boost to defence spending since the Cold War.

There is also concern within the Ministry of Defence about how any expanding costs from a multi-billion-pound programme to build a new fleet of nuclear-armed submarines could eat into the conventional capabilities of the Royal Navy, army and Royal Air Force.

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As things stand, the army would already run out of ammunition within a few days if called upon to fight and would take up to 10 years to field a modern warfighting division of some 25,000 to 30,000 troops.

Mr Sunak inherited from Liz Truss what is being described as a “refresh” of a 2021 review of UK defence and security policy.

The previous prime minister initiated the work last year because the Integrated Review had been written before Russia’s full-scale war in Ukraine and because of growing concerns about the security threat posed by China.

But Ms Truss, unlike Mr Sunak, had also pledged to boost UK defence spending to 3% of GDP from 2%, the NATO minimum, by 2030.

Despite the dramatic change in European security following Mr Putin’s onslaught against Ukraine, an initial draft of Mr Sunak’s “refresh” apparently reinforced the decisions of the original review rather than drawing new conclusions, according to two sources.

This included prioritising major investments in high-end capabilities for the navy, such as the submarine fleet, and the development of a future combat aircraft – in line with what the original document described as an “Indo-Pacific tilt”.

While this all remained relevant, the sources said that the refresh failed to accelerate the need to tackle the more immediate, basic gaps faced by the army, such as a lack of artillery, air defence systems, long-range missiles and stockpiles of ammunition.

It is “complete madness and shows the ineptitude of some of the senior leaders to admit they are human”, a second source said.

The army’s holes have been exacerbated because Mr Sunak is giving much of its remaining warfighting capabilities, including tanks and artillery guns, to the Ukrainian military to help in their offensive operations against Russia.

Sources said the war in Ukraine underlined the importance of these weapons and sufficient supplies and spare parts to sustain an operation.

“It is no good having a small number of high-end, exquisite platforms when you have not got capacity around it,” the first defence source said.

“We had assumed that modern wars can be over in a matter of weeks and we have stocked ourselves for that. Whereas the Ukraine war is teaching us that even for a strong military like Russia’s, it will grind on for months and probably years.”

Referring to the UK supplying weapons to the Ukrainian military, the source added that there was nothing in the refresh about the “immediate pressures”.

“If you do not replace what you’re giving away, then the army cannot fight. Arguably it cannot fight now even at a very small scale – at least not for more than a few days.”

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‘Bareness of UK defence cupboards’

The refresh had been due to be published on 7 March, ahead of the spring budget on 15 March. But the source said: “There is a suspicion that it will get pulled or delayed.”

The bareness of UK defence cupboards could become more apparent to NATO allies at a summit of leaders in Lithuania this summer.

A key focus will be on a new force model, which aims to have more than 300,000 military personnel across the alliance on a much higher state of readiness as part of a major reshaping of NATO’s ability to defend itself and deter threats in the wake of Russia’s war.

But Mr Sunak will only be able “credibly” to offer a brigade – between 5,000 and 10,000 soldiers backed by weapons, armoured vehicles and helicopters – when expectations from a leading ally like the UK will be for a division of up to 30,000 soldiers or even more, defence sources said.

Army due to shrink to 73,000 full-time troops

Even a brigade would lack sufficient working equipment and have nothing like enough ammunition stocks or medical support, they noted.

“Other nations will be offering divisions or corps,” one source said.

“They can say that with confidence because they have now made the investment. For the UK, not only have we not made those investments – and there is no sign the chancellor will – but we are actually cutting the army.”

Under current plans, the army is due to shrink to 73,000 full-time troops from 82,000. It is currently at below 76,000.

Mr Sunak did not make rebuilding his armed forces – in particular the army – one of his top five priorities despite the war in Ukraine and the leading role he says he wants Britain to continue to play in supporting Ukrainian President Volodymyr Zelenskyy.

The prime minister became the first leader to offer western tanks to Kyiv – promising 14 Challenger 2 main battle tanks. He also pledged the army’s remaining stocks of artillery, some 30 AS90 guns, to help the Ukrainian military prepare for new offensives.

But this further erodes Britain’s own defences and its ability to meet its NATO commitments. It will also limit any desire by Mr Sunak to keep helping Ukraine with the weapons it most needs.

“We have played a good role in the political mobilisation” of nations in support of Ukraine, said Professor Michael Clarke, a defence and security expert.

“We have led in a lot of ways when Ukraine was on the defensive… Now Ukraine is on the offensive we have not got much to offer because we do not have it ourselves.”

‘We have to do everything necessary to protect our people’ – government

Commenting on the claims about no new money for defence and a possible delay in the publication of the refresh of the review, a UK government spokesman said: “We do not comment on speculation outside of fiscal events.

“The prime minister is clear that we have to do everything necessary to protect our people, which is why we are ensuring our armed forces have the equipment and capability they need to meet the threats of tomorrow, including through a fully-funded £242bn 10-year equipment plan.

“That equipment plan and the £24bn, four-year spending review settlement agreed in 2020, gave the Ministry of Defence long term certainty and opportunity to plan for all eventualities.

“Despite the economic landscape changing in recent months, the prime minister has stood by that settlement, ensuring our armed forces remain among the best in the world.

“The publication of the Integrated Review Refresh was commissioned to ensure the UK’s diplomatic, military and security architecture is keeping pace with evolving threats posed by hostile nations. That work is ongoing.”

A separate defence source said: “The defence secretary has made clear for years now, about the need to modernise our army to ensure it keeps pace with our allies.

“That’s why at the spending review in 2020 he achieved an extra £16bn… Reinvesting, learning lessons from Ukraine and growing industrial skills takes time.

“We are on track to start to see new tanks, personnel carriers and air defence systems by the year after next.”