Switching Gears: Can Planning Reform Accelerate Data Centre Development?

Directly addressing the manifesto promise to remove “planning barriers to new data centres”, the revised National Planning Policy Framework (NPPF) has landed for consultation with a new approach to data centres that should address the current challenges of delivery across the country. It is also an indication of this Government’s commitment to one of the most important sectors of the UK economy.

The current NPPF makes reference to “clusters of knowledge and data-driven, creative or high technology industries” but this hasn’t been enough to provide Local Planning Authorities with a specific hook needed to support data centre development.

The proposed updated paragraph 85a unambiguously highlights data centres and grid connections and that planning policies and decisions should support the delivery of this key infrastructure. In addition, updated paragraph 84b 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.

These proposed additions to the NPPF place greater emphasis on Local Planning Authorities adopting planning policies and making decisions on planning applications to recognise and address the specific needs and locational requirements of data centres.

A further freeing up of the planning system comes with a softening of what constitutes inappropriate development, specifically on land in sustainable locations and where it utilises the newly termed ‘Grey Belt’. We would like to see tighter drafting of the policy so there is a clear pathway for data centre development on Grey Belt land whilst also balancing the important need for residential dwellings and other forms of commercial development.

Data centre developments represent significant investment value for the country, from both UK operators expanding their existing activities or building new sites, and inward investment by multinationals. They generate high-value-add technical and engineering jobs to the market and provide the kind of cloud operations and services that will enable our continued transition to an efficient, digitally enabled future.

London is the largest data centre market in Europe but is at risk of losing this position due to the uncertainties that have historically been associated with the planning system and accessibility to power.

Combined with the Government’s ongoing efforts to reinforce and decarbonise the grid to ensure there is sufficient access to clean and affordable power, data centres could be the catalyst for increased investment in the renewables sector. They can unlock vast environmental and social benefits when properly planned and integrated into the built environment.

This specific reference to data centres in the NPPF should now remove planning as a barrier to the growth of the industry in England and ensure that their importance in driving economic recovery is given very significant weight in the decision-making process for planning applications. This is also recognised in the accompanying Ministerial Statement, which stresses the role commercial development, such as data centres, play in the engine of the UK’s economy.

While, in theory, there is already precedent for ministerial statements being a material consideration in planning decisions, changes to the NPPF are the subject of consultation. As part of the current NPPF consultation the Government is asking whether the sector would support the introduction of measures that would allow data centre developments to be consented under the Nationally Significant Infrastructure Projects (NSIPs) process.

NSIPs were introduced to streamline the consenting process for large scale infrastructure schemes of national importance as part of the Planning Act 2008, including for energy, transport, water, wastewater, and waste development.

Instead of applying to a Local Planning Authority for planning permission, developers would apply directly to the Planning Inspectorate for a Development Consent Order. This would mean that data centre proposals would be assessed by an Examining Authority in public and decided by the Secretary of State.

We support the Government’s ambition to streamline the consenting process for data centres and welcome the recent changes to the NPPF as a positive development. We strongly advocate for a fully resourced, market-oriented and flexible consenting process to enable data centres the speed to market. The industry’s desire to invest in the UK is strong, and an efficient and responsive NSIP process could be the solution to capture this investment. To further support the industry, we would also welcome the creation of a new Use Class within the existing Order – e.g. B8 (data centres).

This is a crucial opportunity to capture positive change and drive the industry forward. We encourage the industry to respond proactively, collaborating with the Government to embrace these reforms and advocate for economic growth. The NPPF is in draft for consultation, and therefore, the changes have not yet been secured.

To respond to the consultation: https://consult.levellingup.gov.uk/planning/planning-reform/