Taylor Cherrett, director, in the South East team for Turley, discusses the political change in approach to the development of data centres and asks whether local authorities are fully aligned with the new importance given to them. Â
Over the course of the last five years few industries have experienced a demand surge to rival that of data centres.
Data centres have been described as the factories of the 21st Century, and the industry now stands at a precipice of a new era, driven principally by artificial intelligence, which will inevitably redefine our digital landscape.
However, they, and other nascent sectors, were navigating a planning system that was never designed with their industry’s requirements in mind, with policies and national guidance entrenched in planning for traditional employment uses only and often considered a poor relation to housing.
This position, at a national level at least, has changed.
The newly formed Labour Government made promises in its manifesto to ‘remove planning barriers to new data centres’.
Within days of taking office, Deputy Prime Minister Angela Rayner recovered two planning appeals, one in Hertfordshire and another in Buckinghamshire. With this single piece of action the Government provided the clearest indication yet of the importance of the sector and the overall direction of travel.
Then the revised National Planning Policy Framework was published in December 2024, with a notable shift in tone regarding data centres:
- Paragraph 86c now sets out the need for appropriate sites for commercial development that will meet the needs of a modern economy, including specifically data centres, plus laboratories, gigafactories, digital infrastructure, freight and logistics.
- Paragraph 87a highlights the need for data centres and grid connections and that planning policies and decisions should support the delivery of this key infrastructure.
Guidance within the framework was reinforced by the Prime Minister who announced, on January 13, 2025, the AI Opportunities Action Plan published by The Department for Science, Innovation and Technology. The 50-point action plan is aimed at ‘ramping up AI adoption across the UK’, with a spotlight placed on associated infrastructure, including data centres.
The Government says it will set up what it calls AI Growth Zones, areas across the country that will ‘speed up planning approvals for the rapid build-out of data centres, give them better access to the energy grid, and draw in investment from around the world’.
The first AI Growth Zone will be identified as Culham, Oxfordshire – home to the UK’s Atomic Energy Authority. Further announcements are expected in the upcoming Planning and Infrastructure Bill (expected March 2025), the Government’s Industrial Strategy (expected Spring 2025) and emerging Local Growth Plans.
How does this affect the Thames Valley?
The Thames Valley is critical to the UK’s data centre industry and a hot bed of activity.
This position was reflected by correspondence from the Department of International Trade which noted that ‘the Thames Valley is central to the UK’s data centre landscape, supported by a 21st Century digital infrastructure necessary to support data centres’.
It is also home to the second largest data centre hub in the world, Slough Trading Estate and the subject of a number of live data centre planning applications / planning appeals principally around Iver in Buckinghamshire.
It has been widely acknowledged that data centres are locationally constrained due to access to the fibre network, power supply and co-location.
The Thames Valley is ideally placed to benefit from a symphony of these factors including proximity to London, its strategic location in relation to fibre-optic cables which connect London to the main sub-sea fibre optic cables that run to the United States and a hive of data centre activity as well as upgrades to the power network
It is clear that we will continue to see the exponential growth of the data centre industry within the Thames Valley.
However it remains to be seen how local planning authorities within the Thames Valley will deal with planning applications for data centre development despite the clear locational advantages and national policy backdrop.
The strategic importance of the Thames Valley for the data centre industry could lead to the designation of parts of the area as AI Growth Zones. We will learn more in this regard later this year.
Overall, there has been a radical shift in impetus for the planning of data centres in a relatively short time. It will be essential that local authorities and the industry respond positively to meet the challenge of delivering this mission critical infrastructure.
Contact: taylor.cherrett@turley.co.uk, 07802 753 679 or 0118 902 2830.
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