London, England (CNN) -- Britain's military chiefs have been told to prepare for a "leaner and less centralized" Ministry of Defence.
The warning Friday from Secretary of State for Defence Liam Fox marks the latest stage in attempts by the new British government to shake up the country's armed forces and defense spending.
In a speech in London, Fox -- just returned from a trip to Afghanistan where Britain has almost 10,000 troops deployed -- said the previous Labour administration had left a "dangerous deficit" in the public finances, including an unfunded liability in the ministry's balance sheet of around £37 billion ($57.7 billion) over the next 10 years.
Fox steered clear of any announcements on numbers of possible job losses but said he remains committed to a pledge made in opposition to cut Ministry of Defence running costs by 25 percent.
"I don't pretend it is going to be painless," he said.
But he made it clear that any cuts would be more likely to hit those at the top than those at the bottom. A review of the senior rank structure will be carried out, he said, hinting at probable reductions in the number of senior military positions.
"We cannot demand efficiency from the lower ranks while exempting those at the top," he said.
Friday's speech came against the backdrop of the ongoing Strategic Defence and Security Review, Britain's first such review in 12 years. CNN
