Escalating construction costs are threatening to impact on projects as part of a £110 million programme planned in mid Wales.

At the first meeting of the Growing Mid Wales Board since the local elections last month, the issue of funding was raised amid concerns that Government cash allocated might no longer go as far as had previously been suggested.

Ceredigion council leader Cllr Bryan Davies and Powys council leader Cllr James Gibson-Watt are now jointly at the helm of the board, after former Ceredigion leader Ellen ap Gwynn retired and Powys' Rosemarie Harris was voted out of office.

Operations manager Cathy Martin gave the new board and update on where the work now stands after the final deal agreement which unlocks the cash was signed in January.

She said: “Construction costs are escalating.

“That is causing an issue in putting together cost forecasts for their projects.

“We have reports of quotes that are valid for 30 days, which is fine if you’re doing something straight away, but in our case it’s a long-drawn-out process and a project might not be getting on the ground for a year.

“They won’t be able to hold that firm to account for that quote.

“If project costs do increase then potential ask for the Growth Deal will increase and will have an impact on other projects that we potentially could have funded.”

Cllr Davies said: “Costs are increasing just due to inflation without looking at construction and fuel costs.

“Do you think we’d get an increase in the grant from central government to cover this?”

But Ms Martin added: “At the moment there’s not been any indication that the Growth Deal would be increased to compensate for that, we would have to manage it within the programme."

Ms Martin added that a working group to look at escalating costs will be set up.

Work to recruit people for key staff roles as well as work on the digital and sites and premises strands of the deal had been progressing well.

Over the summer more detailed work is needed to whittle down the list of potential projects to invest in before they are presented to the board later this year for decision.

The Welsh and UK Government believe the growth deal has an “important part” to play in the recovery phase of the economy, after Covid-19.

It is thought that the deal could see investment of between £280 million and £400 million over the next 10-15 years, which could create 1,100 jobs.