The Government’s plan to reinstate a $25 million subsidy to the Bermuda Hospitals Board is not enough to bring island’s hospitals back to a healthy financial position, a spokeswoman warned yesterday.

She added that the grant would help delay the impact of “unsustainable decline in the BHB’s revenue” but would not halt the decrease on its own.

It came after David Burt, the Premier and Minister of Finance, announced that the Government would be bringing back the subsidy, which was cut by the former Government in last year’s Budget.

Delivering the 2018-19 Budget, he said: “We have restored the $25 million subsidy for hospital care for children, indigents and seniors, which was cut by the former Government to fund the America’s Cup.

“By reinstating this funding, we aim to progress the sustainability of the hospital while larger reforms in our health system financing are implemented.”

The spokeswoman said the BHB welcomed the Premier’s confirmation that the $25 million would be restored.

“This will help delay the impact of the unsustainable decline in the BHB’s revenue.

She added: “Unfortunately, it is not enough to halt the decrease in revenue and bring the hospitals back to a healthy financial position.”

Speaking in the House of Assembly in March last year, former finance minister Bob Richards said the cuts in last year’s Budget were in part because the BHB had amassed $100 million in cash reserves.

BHB chief executive Venetta Symonds told the Public Accounts Committee in May that the $25 million reduction in its 2017-18 budget subsidy had caused serious financial difficulties for the board.

Although she said that the cuts would have no impact on clinical services for the year 2017-18, she warned that the situation was unsustainable.

The PAC heard that the BHB faced a minimum $40 million deficit for 2017-18.

The spokeswoman added yesterday that the subsidy decrease in last year’s Budget “has contributed to a deficit budget position for the current financial year, which ends on 31 March”.

She said: “BHB anticipated that the $25 million subsidy decrease would apply only to the current financial year.

“BHB was informed at short notice last year of the $25 million decrease in the subsidy for hospital services for seniors, youth and the indigent.

“The impact of this was compounded by significant decreases in fees for diagnostic imaging, dialysis and laboratory services, and changes to the way fees for continuing and long-term care patients are handled.”

She added: “BHB continues to focus on internal efforts to improve value and efficiency, such as defining the scope of clinical services we offer, following a financial recovery plan and focusing on quality improvements.”