Normally senior officers in Britain's armed forces do not do exaggeration.

It's not in their nature, but following a week of extreme turbulence which saw the loss of two GR4 Tornado strike aircraft based at RAF Lossiemouth and the slashing of 20% of the army's strength, a question mark is now hanging over the future of the armed forces. Are they still fit for purpose? The answer comes back from the upper echelons: probably not, at least while the bean-counters are in charge.

Last Thursday, when Defence Secretary Philip Hammond rose in the House of Commons to announced 17 units were to be cut from the army's order of battle his officials were preparing to release the names of the three air crew killed in Tuesday's crash in the Moray Firth where pieces of the doomed Tornado aircraft were still being dragged from the sea.

Both scenes seemed to symbolise the sense of gloom pervading the armed forces. Morale is reported to be at an all-time low in all three services, largely because of the continuing intensity of the operations in Afghanistan but also as a result of the steady-drip-drip of cuts to budgets which are already over-stretched.

Faced by the need to reduce public expenditure, Prime Minister David Cameron believes defence must bear its share of cuts.

In October 2010, the Government announced in its Strategic Defence and Security Review (SDSR) that the Ministry of Defence (MoD) would have to cut £36 billion over the next four years leaving former LibDem leader Paddy Ashdown to complain that "our inadequacies may be exposed by the next unexpected security challenge". That moment seems to have arrived sooner than expected for all three services. Chief of the General Staff, General Sir Peter Wall has spoken of the "shock" at the reduction to the size of the army which will be cut from 102,000 to 82,000 personnel.

He also warned of a "welter of unhappiness" as up to 10% of personnel are made compulsorily redundant.

He insisted no generals are quitting over the reductions, and said that following the Afghanistan conflict, it was unlikely the UK would undertake a similar campaign soon and so the army would be concentrating on other tasks, such as training foreign armies to better manage their national security and helping support civil authorities in times of emergency.

Wall spoke of the need to make a bigger commitment to the reserves. As part of the changes the Territorial Army is to be doubled to 30,000, resulting in a combined force of 112,000. The Army 2020 plan will see four infantry battalions disappear. A fifth, the 5th Battalion the Royal Regiment of Scotland (Argyll and Sutherland Highlanders) will be reduced to a single public-duties company carrying out ceremonial duties in Scotland.

Shadow defence secretary Jim Murphy described the plan as a "military gamble" which would leave Britain with its smallest army since the Boer War.

The Royal Air Force

No sooner had the crash of the Tornados been announced than a female relation of a serving member of the RAF at Lossiemouth claimed defence cuts in the shape of reductions in personnel and poor working conditions were to blame for the accident.

"The guys who are left are under increasing pressure and they're having to work such long hours," she said. "The reason that these crashes are happening is because everybody is undermanned, the engineers are overworked. The planes are too old. They can no longer fix them properly. When they're flying they're knackered."

The RAF declined to make any statement other than to say an inquiry would uncover the cause of the crash, but her concerns about the effect of defence cuts are not without foundation.

Under SDSR the RAF lost its fleet of Harrier jump-jets, the Nimrod maritime reconnaissance aircraft was scrapped, bases were closed, including RAF Kinloss, and numbers were reduced by 5000 to 33,500.

Until the cause of the crash is discovered, human error cannot be ruled out, but the fact that it took place at speed and at minimum altitude reinforces existing concerns about the RAF policy of flying low-level operations. Within the past three years four Tornados have been lost, and five airmen killed, in training exercises in Scottish skies.

Low flying has been integral to RAF strategy since the Second World War – the Lossiemouth-based 617 squadron is the original Dambuster squadron – and the RAF takes great pride in its ability to fly faster and lower than other nation's air forces. During the annual Red Flag exercises held at Nellis air force base in Nevada in America RAF warplanes regularly take part and pilots attempt to outwit their US opponents with ground-hugging tactics.

However, in an age of precision weapons and pilotless drones questions have been asked about the wisdom of flying ageing aircraft at low level. The original purpose was to improve Nato's ability to penetrate the Warsaw Pact air defence system, but today that rationale no longer exists.

Two of the air crew killed last week were pilots under training – Flight Lieutenant Hywel Poole and Flight Lieutenant Adam Sanders of 15 (Reserve) Squadron – and while there is no suggestion they were at fault, low-flying tactics continue to be queried especially at a time of cutbacks. Last year, 100 RAF pilots were made redundant to save an estimated £300 million and of those 20 were fast-jet trainees.

The Royal Navy

Following SDSR, the fleet operated by the Royal Navy is the smallest since the seventeenth century. All that remains is 30,000 sailors (a reduction of 5000) and a surface fleet of 19 destroyers and frigates. While this will be balanced by the gradual introduction of six Type-45 Daring class destroyers with state-of-the-art electronics, there is a feeling in naval circles that the MoD has chosen sophistication in place of capability.

Three Type-23 Duke class frigates have also been paid off and with their disappearance the navy has lost a tested workhorse which proved its versatility in maritime operations across the globe – most recently last year when HMS Cumberland took part in the evacuation operations in Libya while on her way to the scrapyard.

However, excluding the Trident nuclear submarines whose future is still to be decided, the most contentious naval issue is the construction of the two Queen Elizabeth class aircraft carriers. The first of the 65,000-tonne leviathans is gradually being constructed at various shipyards around the country, including Rosyth and is keeping to timetable. Due to enter into service in 2018, the two ships have attracted criticism over the type of aircraft which will be operated from their decks.

Following the scrapping of the Harrier jump-jet fleet in 2010, the navy wanted US-built conventional take-off F-35C fighters and it was argued vertical take-off skills were no longer required. Then, two months ago, in an embarrassing U-turn the Government decided to save money on expensive catapults and landing traps by ordering the US-built F-35 Lightning which has short-take-off-vertical landing capabilities similar to the Harrier.

This means that not only has that expertise been lost but by the time the carriers enter service it will have to be relearned at huge expense. As a former Harrier pilot said at the time, "landing an aircraft on a bucking deck in a force-nine gale in mid-Atlantic can't be taught overnight".

However, last week First Sea Lord Admiral Sir Mark Stanhope took the opportunity to defend the introduction of the carriers as a much-needed element in the country's global capabilities, telling a conference at the Royal United Services Institute: "To put it simply, countries that aspire to strategic international influence have aircraft carriers – and countries that have them, use them."

The Army

As the service which has borne the brunt of the action in Afghanistan, the army has special reason to feel aggrieved by the cuts that have been inflicted on it.

The harsh reality is that the army faces a bleak future. In any forthcoming operation its capability will depend on the presence of 30,000 part-time reservists of the Territorial Army (TA), a move that has caused deep misgivings.

"I had several specialist TA soldiers under my command in Helmand and they were extremely professional," says a serving brigade commander. "So no problems there – but I do think that there will have to be a new compact with employers who are hardly going to be chuffed if their brightest and best are suddenly bidden to spend six months somewhere hot and sandy."

Although the MoD claims this issue will be addressed, the Government is taking a calculated risk with its new reliance on the TA. The intensity of modern warfare means soldiers have to train together to fight together and that may introduce additional strains on training programmes.

But the bottom line is that the fighting strength of the army has always depended on the number and ability of its infantry soldiers. Once those numbers are cut back it becomes increasingly difficult to mount effective combat operations.

In recent campaigns in Sierra Leone and Helmand province the army has been able to punch above its weight, but even architects of the reforms, such as Wall, acknowledge that may be a thing of the past.

"Increasingly, that means forming coalitions that include regional partners as well as our traditional allies," he admits. "They are becoming ever more important both in political and military terms, but also to confer international legitimacy on our actions."

Wall's immediate predecessor, General Sir Richard Dannatt, was less diplomatic: "By definition, it [the army] will be able to do less," he said. "It's pretty obvious that if you are going to lose 20,000 troops you will lose important units."