The rising cost of fuel, materials and transport costs caused by Donald Trump’s war with Iran could force Powys council to borrow more money to fund its capital building projects.

A report for the meeting of Powys County Council’s Finance Panel on 13 May will update councillors on the Capital Budget as it stood at the end of February.

The report shows that the council has earmarked £83.19m to be used on building and maintenance projects.

By the end of February, only £44.21m – which represents 53 per cent of the budget – had been spent.

The report said: “Because grant funding often arrives part way through the year, sometimes very late, services do their best to spend it before the year ends.

“This usually means a lot of the spending happens in the final months, and that’s exactly what we’ve seen again this year.

“The spend remains low against budget but substantial spend is expected through to the year end.”

To finance the programme the council needs to borrow £26.68m, with interest accrued added to the budget

The council “anticipates” that this amount of borrowing will drop but the conflict in the Middle East is causing an issue.

The report said: “Since the end of February, the conflict between the United States and Iran is already causing major disruptions to global energy markets, shipping routes, and wider supply chains, all of which may have implications for the council and schemes in the capital programme.

“Higher fuel, transport, and materials costs could increase the overall price of delivering schemes, while an increase in interest rates will make it more expensive for the council to borrow to fund its capital expenditure.”

The council says it will continue to monitor the impact the conflict has on its plans and “act where necessary.”