Data centres and the planning system: Has policy shifted in their favour?

Alongside the Government's designation of data centres as Critical National Infrastructure and the inclusion of a dedicated data centre policy within the draft London Plan, planning decisions are increasingly being considered against a more comprehensive planning policy framework.

This reflects a wider shift in the way data centres are viewed, with growing recognition of their role in supporting digital infrastructure, economic growth and the UK's AI ambitions.

Policy E1 of the NPPF now requires LPAs to set out clear economic strategies that identify opportunities for AI Growth Zones. Part C of policy E1 requires development plans to allocate sites to implement the economic vision and strategy and meet needs over the plan period. This includes making provision for clusters, networks and sites for data-driven or high-technology industries, and the infrastructure required to support these industries (which includes data centres along with associated generating capacity and electricity network infrastructure).

Policy E2 places substantial weight on the economic benefits of proposals for commercial development which allow businesses to invest, expand or adapt; proposals that support the implementation of the Government’s Industrial Strategy; and proposals for Industrial Strategy Zones and AI Growth Zones.

The NPPF also recognises the importance of infrastructure availability when considering proposals associated with large-scale power demands, including opportunities to co-locate power generation and data centre development.

Finally, under the flood risk vulnerability classification (Table 2, Annex F), data centres have been re-classified as ‘Essential Infrastructure’.

In practical terms, this means that data centres may be considered within parts of the flood risk hierarchy where other forms of commercial development may not be appropriate.

In areas 3a and 3b, an exception test would be required, and the development would need to be designed to be operational during times of flood, or otherwise water compatible.

Collectively, these changes provide a firmer policy basis for supporting data centre proposals where environmental and infrastructure impacts can be satisfactorily addressed.

The draft London Plan goes a step further and introduces a dedicated policy in relation to data centres (GLE3), aimed at meeting identified need in suitable locations whilst mitigating adverse impacts.

GLE3 encourages Boroughs to identify suitable locations for data centres to meet identified need, taking into account competing uses for land (such as housing and employment needs).

Where suitable locations cannot be identified, it encourages firstly, working with neighbouring authorities; and secondly, seeking to identify opportunities within the grey belt, or on the edge of the Broad Locations for Growth in the Green Belt.

The development management element of GLE3 sets out support in principle for data centres in suitable locations, and support in other locations, depending on certain criteria, such as through the provision of justification and mitigation of adverse impacts.

Part F of the policy requires data centre proposals to be as clean and sustainable as possible and demonstrate the use of features such as heat recovery infrastructure, electricity and water efficiency measures, and electricity generation on site or nearby, where feasible.

Taken together, these provisions demonstrate a growing recognition that data centres require a tailored planning approach rather than being assessed solely under more general industrial land policies.

Buckinghamshire’s strategic planning committee recently approved an application for a 92,000 sqm data centre on a site in Wycombe following the approval of a film studio scheme on the site around 18 months earlier.

In assessing the scheme, the Committee Report attached ‘substantial weight’ to the economic benefits of the proposal in terms of job creation, investment in the digital economy, and to the fact that the proposal delivers an employment use on a site allocated for employment development.

Whilst the operational employment generated by the scheme was acknowledged to likely be lower than the previously approved film studio development, substantial weight was nevertheless attached to the wider economic benefits of the proposal and its contribution to digital infrastructure. The overall benefits of the scheme were ultimately found to outweigh the identified harm.

In a different context, a data centre was also recently approved in Spitalfields as part of a comprehensive redevelopment of the Truman Brewery site. In considering the appeal, the Secretary of State referred to the Inspector’s conclusions that the public benefits associated with the provision of a data centre in this location would be significant. A need for data centre capacity was identified within the evidence.

Together, these decisions suggest that support for data centre development is no longer confined to traditional industrial locations. From strategic employment sites to dense urban environments, decision-makers appear increasingly willing to attribute significant weight to the economic and infrastructure benefits associated with data centre provision, particularly where a clear need can be demonstrated.

The Spitalfields decision is particularly interesting in this regard, as the data centre forms part of a wider mixed-use redevelopment rather than a standalone employment scheme. It demonstrates that, in certain circumstances, data centres can sit alongside other commercial and town centre uses, rather than being confined solely to traditional industrial locations.

Whilst the emerging policy framework is becoming increasingly supportive of data centre development, planning permission is far from automatic.

Recent policy changes provide a clearer framework against which prospective proposals can be appraised, suggesting that the principle of development may now be easier to establish, particularly where proposals can demonstrate alignment with wider economic growth, digital infrastructure and AI-related objectives.

However, site selection remains critical. Electricity capacity, water availability, air quality impacts associated with back-up generation and wider sustainability credentials are all likely to remain important considerations in the determination of planning applications.

For landowners, these policy changes may also broaden the range of potential opportunities capable of accommodating data centre development, particularly where there is scope to co-locate energy and digital infrastructure.

It will be interesting to see how local planning authorities respond to this new framework through the plan-making process. Policy E1 of the NPPF now requires development plans to make provision for data-driven and high-technology industries, including associated infrastructure. As local plans are reviewed, we may begin to see dedicated site allocations for data centre development, particularly within or adjacent to existing employment areas where grid capacity, power generation and supporting infrastructure are already present.