This is in case too much money, that could fund services, is eaten up in paying for borrowing.
At their meeting on Friday, June 25, committee members looked at the capital budget for the last financial year and how much money was borrowed to help finance it.
Panel chairman and independent member John Brautigam said: “The financing percentage is expected to rise to 7.68 per cent by 2030.
“We are heading towards a position where we have to question the affordability, we have to define ourselves some sort of limit on what we’re prepared to have.”
Mr Brautigam pointed out that it was expected that the school’s projects would cost £300 million of which Powys would need to contribute £105 million.
Finance portfolio holder, Councillor Aled Davies, said: “When we take out borrowing, we are thinking about the next 10 to 40 years.”
He added that borrowing “is not the only source of funding” and that an asset review was taking place.
Any money made in the future from selling assets could help fund the building programme.
Head of finance, Jane Thomas told the panel that since the policy had been approved changes had been made due to extra grant funding being received.
Ms Thomas said “This means that projects need to be re-profiled and recalculated.
“We know that cabinet has set their direction, what we have to do is come up with an affordable solution that delivers on that.”
Councillor John Morris, said “We need to get an understanding of whether this is affordable or not, it’s fine to say it is but we need more than that, 3.8 per cent is used to repay our capital borrowing what is the safe amount?
“We need to understand what we can risk and be safe?”
Ms Thomas said that she was “not going to stick my neck out” and give the panel a figure at the meeting.
Cllr Davies believed the panel should be looking at both the positives and negatives of the building programme.
Cllr Davies said: “If you don’t spend you have to look at the maintenance backlog to ensure our schools are usable for the next generation, it’s not as simple as saying it’s affordable or unaffordable, we look at the whole picture.
“There’s no precise line to draw in the sand.”
Due to the coronavirus pandemic, projects had been put on hold which saw the budget shrink from £132 million to £72.91 million, of which £61.83 million was actually spent.
This also saw borrowing for these schemes fall from an expected 56 per cent to an actual 38 per cent.
This means that 3.8 per cent or £10.166 million of Powys’ net budget of £269 million, was set aside to pay for borrowing costs.
When the 2020/21 budget had been agreed, £12.18 million had been set aside to support borrowing.