Hammond denies 'holding out' on cuts to defence budget 29 May 2013 Last updated at 09:25 Defence Secretary Philip Hammond has denied he is "holding out" over further cuts to his department. The Treasury has agreed cuts of 10% with seven departments for 2015-6 but discussions are continuing with others, including the Ministry of Defence. Mr Hammond said he expected to have an "adult conversation" with Chancellor George Osborne in the coming weeks. There was a difference, he stressed, between efficiency savings and cuts which would hit frontline capability. Mr Osborne is seeking £11.5bn of further savings for 2015-6 on top of the billions already agreed for the current four-year spending review ending in 2015. Proper and mature The coalition government has said it will continue to ring-fence spending on health and schools in England and international aid, meaning other areas are facing cutbacks of between 8% and 10%. Among those set to be most affected are the Home Office, Business, Transport and Defence. There has been media speculation Mr Hammond is unhappy about the scale of cuts being sought and has been arguing for some of his departmental spending to be protected by being reassigned to ring-fenced areas, such as international aid. The defence secretary told the BBC that he was "not a hold out" when it came to agreeing cuts but that the process deserved "proper and mature consideration" across government. He said he understood the pressing need for the government to rebalance the public finances and said his department was working with the Cabinet Office and the Treasury to identify the scope for further savings. "The process is coming to a conclusion and then I expect to sit down with the chancellor and chief secretary and have an adult conversation about how we go forward on the basis of... what we can reasonably do," he said. Aggressive The MoD was already in the middle of a "very aggressive" efficiency drive, he added. He stressed there was a difference between back-office and administrative savings which would have no impact on military capability, and those which may affect the UK's frontline operations. We can look for efficiency savings which everybody should be seeking all the time. If we are to go beyond efficiency savings, we will have to have a discussion across government about how and where we would take out additional capability. We should be very clear there is a difference between efficiency savings which may be difficult to achieve but are painless in terms of the impact on the frontline and output cuts which are of a very different order. Britain currently spends around £34bn a year on defence but major reductions in troop numbers are taking place. About 20,000 Army personnel are set to lose their jobs by 2020 as numbers are cut to about 82,000. The government has committed itself to a real-terms increase in spending on military equipment after 2015.