In January 1945 Cunningham was appointed a Knight of the Thistle and raised to the peerage as Baron Cunningham of Hyndhope, of Kirkhope in the County of Selkirk. He was entitled to retire at the end of the war in 1945 but he resolved to pilot the Navy through the transition to peace before retiring. With the election of Clement Attlee as British Prime Minister in 1945, and the implementation of his Post-war consensus, there was a large reduction in the Defence Budget. The extensive reorganisation was a challenge for Cunningham. "We very soon came to realise how much easier it was to make war than to reorganise for peace." Due to pressures on the budget from all three services, the Navy embarked on a reduction programme that was larger than Cunningham had envisaged.