A $25 million cut in the Bermuda Hospitals Board budget is not expected to affect services for the year ahead, but it will impact investments to improve the Mid-Atlantic Wellness Institute, general wing facilities and IT systems.

Bob Richards, the Minister of Finance, announced the one-off cut in his Budget Statement yesterday.

“Three years of concerted efforts to become more efficient has placed the BHB in a more stable financial position,” Mr Richards said.

“Considering the relatively strong liquidity position of the BHB, it is anticipated that the BHB can withstand the one-year reduction in funding.”

Speaking of the areas that would be affected by the reduction, a BHB spokeswoman said: “Funds saved for these purposes are used to cover a significant shortfall in payments. BHB will plan to implement any delayed facility and IT improvements in the next fiscal year commencing April 2018.

“Should budgets not return to parity after this year, however, we will need to look closely at what services the community needs us to continue to provide, and what we can afford to deliver safely.”

The BHB said its 1,800 staff had made “huge cost savings” despite low fee increases since 2012.

The spokeswoman added: “Subsidy budgets routinely set below the true cost of care. Our staff come to work each day to relieve the suffering of the body and mind, and do what is needed to keep safe services running. But we also experience the financial and social suffering around us.

“We feel it in the shortfalls in funding in mental health and medical services and the non-payment of bills, and we see the people who come through our doors struggling to pay for the services they need.

“Despite these difficulties, our public town hall earlier this month has given us great hope that as a community we can work together to achieve quality, effective, compassionate services. We will hold to our strategic plan to make these improvements in the hope that Bermuda’s economic situation continues to improve and that Government is once more able to support the cost of caring for our most vulnerable patient groups — our youth, indigent and seniors.”

The building of a new acute wing at King Edward VII Memorial Hospital had left the BHB in a precarious financial position in 2015, but a reduction in operating expenses was successfully implemented.