Government decisions to reduce the defence budget and lower strategic ambitions have prompted the British Army to undertake its most radical reorganisation for 50 years. The long-term viability of the project relies on the successful withdrawal from combat operations in Afghanistan and a significant increase in the utility of the army's reserve forces.
The October 2010 Strategic Defence and Security Review (SDSR) was formulated in response to the urgent imperative of financial austerity, as well as the war-weariness of the British public and politicians. Under the review, UK defence spending was reduced by 8% in inflation-adjusted terms over four years. Ambitions for UK military operations were lowered: the maximum size of forces on operations was reduced, while the time allowed for them to get ready to deploy overseas was extended. The maximum strength for a future war-fighting intervention at divisional level along the lines of the two land attacks on Iraq in 1991 and 2003 was reduced from 45,000 personnel deployed with six months' notice to 30,000 deployed at up to a year's notice.
As envisaged by the SDSR, the army would be reduced in size by 7% by 2015 and cease permanent basing in Germany by 2020. These changes were intended to be achieved without major organisational change. But it later became clear that further cuts were necessary in order to meet the government’s austerity targets. In July 2011, then-defence secretary Liam Fox announced the army's size would be reduced by 20% by 2020, from 102,000 to 82,000 people. However, the part-time reserve Territorial Army (TA) was to be revitalised and have its trained strength increased from 19,000 to 30,000 people.