With the rapid expansion of digital services and the uptake of artificial intelligence (AI), the demand for data centres has never been greater. Market estimates suggest that between 12-15 hyper-scale data centres will be needed in the next few years just to meet the growing IT needs of businesses in and around London.  With a spate of recent planning appeal refusals for such large-scale data centres the Government has moved to address some of the planning difficulties that they previously faced.

Data centres need to have good access to the national grid and digital networks, they need to be secure and close to major users.  Many of the suitable sites have happened to lie within the green belt.  Part of the difficulty many developers were finding was that the planning system did not recognise any particular need for data centres, with nothing specifically stated about them in national policy.  This was remedied through changes to the National Planning Policy Framework (NPPF) that were published in December 2024 that now provide some national policy support for the development of data centres.

The revised NPPF rectifies this with the following advice:

Planning policies should…pay particular regard to facilitating development to meet the needs of a modern economy, including by identifying suitable locations for uses such as laboratories, gigafactories, data centres, digital infrastructure, freight and logistics (paragraph 86(c)).

This wording creates a positive expectation that suitable sites for these types of modern economic uses will be identified by Councils in their local plans.

A second reference is made to datacentres at paragraph 87 of the revised NPPF, by replacing policy for the need for storage and distribution operations at a variety of scales and in suitably accessible locations, with the following policy advice:

This includes making provision for… new, expanded or upgraded facilities and infrastructure that are needed to support the growth of these industries (including data centres and grid connections).

These changes are complemented by the changes to NPPF green belt policy that recognise that commercial development in the green belt should not be regarded as inappropriate where there is a demonstrable unmet need for the type of development, it is in a sustainable location and the development uses grey belt land without fundamentally undermining the purposes of the remaining green belt.

At the same time as introducing the NPPF changes the Government promised to make large scale data centre proposals subject to the centrally controlled Nationally Significant Infrastructure Projects (NSIP) consenting regime.  However, the specific size threshold that will determine when data centres must adhere to the NSIP process has not yet been decided.

Following the changes to the NPPF the Government published its “AI Opportunities Action Plan”.  This Action Plan complements the Government’s Industrial Strategy and explains how the use of AI and the development of powerful data centres is intended to make the UK an artificial intelligence superpower.  This Action Plan comprises the official response to the publication of the Artificial Intelligence Opportunities Action Plan, which was an independent report which focused on how the Government should approach the Artificial Intelligence sector. 

The Action Plan recognises that there are a number of challenges to overcome in order to make the vision a reality.  First of all, there is the need to build sufficient, secure, and sustainable AI infrastructure.  To this end the Department of Science, Innovation and Technology will publish a long-term data centre capacity strategy in Spring 2025 and is committed to setting out a 10-year roadmap for the improvement of capacity. 

Secondly, the Government intends to focus its efforts through the dentification of AI Growth Zones.  The first AI Growth Zone is intended to be delivered at Culham in Oxfordshire, the headquarters of the UK Atomic Energy Authority, subject to the agreement of a public-private partnership that delivers benefits to the local area, the UKAEA’s fusion energy mission and the UK’s wider national AI infrastructure. By Spring 2025, the Government will set out a process to identify and select further AI Growth Zones. This process will consider how AI Growth Zones can support regional growth opportunities. 

Another issue facing data centres is their slightly ambiguous planning classification, which can create obstacles in the minds of some Councils.  A data centre is typically classified as a "B8" use class, which refers to warehousing and storage, as its primary function is to store and distribute data.  But large data storage centres have a very different impact on their local areas than logistical hubs.   The transport and employment needs of both types of operation are quite different. Data centres with a B8 planning permission could be converted into other uses without further planning consent, such as logistics, which generates a lot more traffic.   The Artificial Intelligence Opportunities Action Plan had suggested remedying this through the creation of a separate use class for data centres, but this suggestion has not been addressed in the Government’s response.

There is clearly plenty to be done to pave the way to the UK becoming an AI superpower.  Delivering on the Government’s action plan is an essential first step, and hopefully clarifying the planning use class for data centres will follow soon after.