As part of the Labour government’s overhaul of planning rules, companies looking to build new data centres would be able to apply for classification as “Nationally Significant Infrastructure Projects” or (NSIPs) — meaning projects would receive a more centralised and expedited planning process overseen by the UK government.
A Ministry of Housing, Communities and Local Government spokesperson told Capacity: “Our changes to the planning system will support the growth of key sectors needed to deliver a modern economy.
“As part of this, we will ensure data centres, gigafactories and laboratories are capable of being dealt with through the Nationally Significant Infrastructure Projects regime, as set out in our response to the National Planning Policy Framework consultation.”
The planning overhaul is being overseen by Deputy Prime Minister and housing secretary Angela Rayner and is part of a wider push by the Labour Government to prevent local councils from slowing down planning applications.
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The Significant Infrastructure Project designation was introduced back in 2008 under the previous Labour government. It’s designed to streamline what the government deems to be major infrastructure projects to ensure they’re put through faster.
The Planning Inspectorate, an agency that sits under the Ministry of Housing, Communities and Local Government, is responsible for the planning process for NSIPs, traditionally handling major infrastructure projects like roads, power generating stations, and harbours.
Data centre operators looking to build in England would be able to apply for consent to construct under an NSIP designation, with the Planning Inspectorate tasked with examining applications and making recommendations to the relevant Secretary of State, who then has the ultimate decision to greenlight the project.
By moving responsibility of greenlighting data centres away from local councils, the Labour government hope to ensure projects are more speedily signed off, with much of England’s local planning committees slowing projects down by behaviour some consider to be “Nimby” (not in my back yard, where residents oppose a project in the area they live but wouldn’t raise objects regarding similar developments elsewhere).
The government floated the idea of allowing data centre projects to apply for NSIP status as part of a consultation earlier this year.
A total of 1,007 respondents answered the question of extended NSIP support for data centres, with 605 (60%) agreeing and 402 (40%) said they did not.
Following the consultation, the government response stated that extending NSIP support to data centres should be pursued "due to the overall favourability of responses and important role these types of development are to supporting the government’s economic growth mission".
In its response to the consultation, the government stressed it would give "careful consideration" on whether to limit the direction power to developments — with respondents clear that sites should be limited by scale.
The government's response to the consultation reads: "Whilst we recognise concerns around a perceived lack of local input in the NSIP consenting process, local authorities are statutory consultees in the development consenting process for NSIPs and play a key role during all stages of that process.
"As well as engaging with applicants pre-application and submitting post-application full and detailed representations to the Examining Authority, they are also required to submit Local Impact Reports giving details of the likely impact of the proposed development on the authority’s area (or any part of that area)."
The potential for new data centres to obtain a designation of “Significant Infrastructure Projects” adds to sites being deemed “Critical National Infrastructure”, providing facilities with increased protections owing to their importance to the British economy, putting data centres in the same vein as the country’s emergency services and water infrastructure.
Rayner already made headlines this week for overriding a decision by Buckinghamshire County Council to block a proposed 65,000 square metre data centre from Corscale, arguing that the site would “make a significant contribution” to the UK’s digital economy.
The planning overhaul is part of the Labour government’s reset after a tumultuous first five months in power, with Sir Keir Starmer’s administration keen to push through its “Plan for Change” platform, which includes building 1.5 million new homes.
Notably, the 48-page plan states that the UK’s current planning rules sees the country “lack key infrastructure that we should be able to rely on such as… data centres needed for industries of the future”.
“It is slower and more costly to build economic infrastructure in England than other major countries like France and Italy,” the Labour government’s publication reads.
In a BBC appearance earlier this week, Deputy Prime Minister Rayner said planning reforms were needed to remove what she described as “chaos and subjectiveness” from local authorities that have seen major infrastructure projects “stuck in the system for years.”
“Because we haven't had these compulsory plans locally, we've seen speculative development where greenbelt land has been developed on... we've told councils they've got to have those plans,” Rayner said.
Christian Silk, a planning and environment partner at Osborne Clarke, said: The obvious advantage of consenting through the NSIP regime is that it has resulted in a high success rate for other qualifying developments, with well over 90% of the 144 applications determined being granted development consent.
"Also, development consent orders can grant powers beyond permission to construct development (being the limitation of the planning application process), including compulsory purchase powers and a number of other consents. However, in comparison to planning applications, the development consent application process is considerably more detailed and usually more lengthy and costly."
Silk told Capacity that developers will have to strike a balance between the risks of the planning application and their investment of time and costs relating to the development consent application process when weighed against the high success rate of applications.
"Despite this, the Government's response clearly indicates support for and recognition of the importance of data centres to the UK and some of the challenges that developers have faced, particularly in terms of site locations, especially in the green belt," Silk said.
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