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''Years of uncertainty'' for Dunedin's Ashburn Clinic ended this week with a $1.1 million annual funding increase from the Government.
Ashburn Clinic board chairman Lindsay Brown, of Dunedin, said the ''fantastic'' increase meant the private psychiatric hospital would not have to seek short-term financial relief from the Ministry of Health.
''It saves the clinic. I think financially it had become not viable on the basis of the existing contract, plus other patient numbers,'' Mr Brown said.
The clinic reached the point at which it could not carry out further staff restructuring to deal with shortfalls. It had been deferring some spending, although not in vital areas, he said, declining to give examples of deferred spending.
''It has been years of uncertainty,'' he said.
Ashburn was unique in having a therapeutic approach to psychiatric care.
''I think everyone wins out of this.
''It is a national facility . . . our patients come from all over New Zealand.''
Mr Brown, who became chairman last September, ''could not have asked for a better start'' to the role, but he would not take the credit for sorting out the hospital's long-standing financial issues.
He praised the Ministry of Health, whose senior personnel were supportive, working through a comprehensive and ''appropriate'' process to approve extra funding.
Health Minister Tony Ryall, who announced the boost, was also a supporter of Ashburn, Mr Brown said.
With the increase, the clinic would receive nearly $4 million public health funding in 2014-15. In addition, the ministry was working with ACC to draw up a new joint contract, which could see bed numbers increase.
In a media release, Mr Ryall said the move put Ashburn on a firm financial footing.
''This is great news for the 60 or so staff who work at Ashburn Clinic, the clients and their families, as well as the wider community.
''Ashburn Clinic has been providing mental health services, including inpatient acute mental health beds, for over 130 years.
''Following concerns about the sustainability of the service, the Ministry of Health carried out a funding review of Ashburn Clinic last year.
''As a result of this review, Ashburn Clinic is receiving additional funding. The ministry is also working with ACC on a new joint contract, which is expected to be in place by midway through this year,'' Mr Ryall said.