The Ministry of Defence faces cuts to its backroom operations to ensure frontline troops get everything they need, Liam Fox said today.
The number of senior military officers could be cut as part of efforts to rein in costs at the Ministry of Defence, Liam Fox suggested today.
The Defence Secretary said the "ghastly truth" was that Labour's financial mismanagement had left a £37 billion black hole in the MoD budget and drastic reform was essential.
In a speech in London, he said the department would be restructured and decentralised, with top brass given more control over running their own services.
There would also be operational changes to improve efficiency.
"We need to challenge some of the fundamental assumptions which drive force generation, such as tour lengths and intervals, taking into account the varying pressures on our personnel resulting from widely varying missions to see if we can update our practices and produce greater efficiency while implementing the military covenant," Dr Fox said.
"We need to review all our current practices to ensure that we are using our greatest asset - our people - to the best of our ability."
While ruling out merging the main services, he added: "We will also consider whether the current senior rank structure across the services is appropriate for the post-SDSR (strategic defence and security review) world.
"We cannot demand efficiency from the lower ranks while exempting those at the top."
Dr Fox said the MoD had an "unfunded liability" of £37 billion over the next 10 years.
He set out plans to reorganise the department into three pillars, Policy and Strategy, the Armed Forces, and Procurement and Estates.
There would also need to be a "cultural shift which will see a leaner and less centralised organisation combined with devolved processes which carry greater accountability and transparency".
Dr Fox announced that a Defence Reform Unit was being set up under Lord Levene to guide the "hard thinking" and complement the ongoing strategic defence and security review.