Deep cuts to British army put its capabilities at risk - watchdog

* UK army in process of major downsizing

* Report warns reforms carry big risks

* Says army's ability to do its job imperilled

By Kylie MacLellan

LONDON, June 11 (Reuters) - Deep cuts to Britain's army carry significant risks that could prevent it from achieving its objectives, the country's spending watchdog said on Wednesday, raising questions about the U.S. ally's ability to take part in foreign operations.

Britain is in the process of shrinking its armed forces by around a sixth, which will leave the army with 82,000 soldiers in 2018, down from 102,000 in 2010. It hopes to compensate by increasing the number of reserve soldiers to 30,000 from 19,000.

The National Audit Office (NAO), Britain's spending watchdog, said the cutback plans - pushed through in a bid to save money - had not been properly tested and involved major risks.

"The Army has made progress in implementing structural changes and reducing the size of the Regular Army, but the transition to the new Army structure comes with some significant further risks," the NAO said in a report.

"If not mitigated, they could significantly affect value for money and the Army's ability to achieve its objectives."

The scale of the cuts, part of a plan to help reduce the country's large public debt, has fuelled a debate about Britain's diplomatic and military role in the world and its ability to project force globally.

The cuts come as Britain prepares to withdraw its troops from Afghanistan by the end of this year.

Senior military figures have complained that the reductions go too far, while U.S. politicians such as Robert Gates, the former U.S. defence secretary, have said the changes mean London can no longer partner with Washington as fully as it used to.

STAFFING GAP RISKS

The NAO said the army was behind its target for recruiting both regular and reserve soldiers. Outsourcing company Capita (Frankfurt: A0MZ15 - news) recruited just under 2,000 reserve soldiers by the end of March, compared with a requirement of 6,000.

The NAO's report, looking at progress in implementing the government's "Army 2020" plan, said the Ministry of Defence had not fully assessed the value for money of its decision to reduce the size of the army, or whether enough reserves could be recruited and trained in time.

"Transition to the new structure comes with significant risks," the report said. "If the reserve recruitment shortfall persists there is a risk of staffing gaps in some parts of the army structure and increased pressure on regular units."

The NAO said the Ministry of Defence's own model suggested the number of trained reserves may not reach 30,000 until 2025.

The army should put contingency plans in place in case it fails to recruit enough staff, the NAO recommended.

Defence Secretary Philip Hammond rebuffed this, saying the government was confident it could achieve its recruitment targets by 2018.

"The Ministry of Defence has always been clear that the numbers in the reserves would fall before they increased," he said in a statement.

"The application process has been simplified, medical clearance procedures have been streamlined and the army is running a high profile recruitment campaign."

Earlier this year, a committee of British lawmakers warned the cuts could leave the country unable to adequately respond to future threats. (Editing by Andrew Osborn and Hugh Lawson)