Powering progress or protecting resources? Data centres enter a critical phase

The UK’s push to expand digital infrastructure is reshaping the planning landscape for data centres. With policy evolving rapidly and political attention intensifying, data centre developers face a new regulatory landscape when bringing sites forward.

In a headline‑grabbing development last week, the government conceded that it made a legal error in granting planning permission for a hyperscale, 18‑acre data centre located on Green Belt land adjacent to the M5.

The West London Technology Park—brought forward by Greystoke Land Ltd—was intended to deliver two data centre buildings (total 90MW), a substation, a district heating network, and extensive green spaces, all built on a former landfill site. The developer claimed it would attract £1bn of investment and proposed extensive landscaping to mitigate visual impacts. Nevertheless, Buckinghamshire Council indicated that it received 63 objections, with concerns centring on water and electricity demand - issues that are becoming increasingly prominent in the public conversation about the cost of data centres.

Buckinghamshire Council duly refused consent, and the decision was escalated to the then Secretary of State, Angela Rayner, who approved the proposal and granted the planning permission. Despite the government's initial intention to contend the legal challenge (launched in August by tech non-profit Foxglove and environmental charity Global Action Plan) the Ministry for Housing Communities and Local Government (MHCLG) has now admitted a 'serious logical error' had been made in granting permission and accepted that the decision should be quashed due to a failure to undertake an Environmental Impact Assessment and to properly assess the scheme’s climate and environmental impacts.

This is a major embarrassment for the UK government, which has been focused on prioritising both data centre infrastructure and planning reform since coming into office. In September 2024, data centres were designated part of the UK's Critical National Infrastructure ("CNI"), along with other key sectors like energy, water and transport, emphasizing the priority that is being placed on their development. In its recent paper on Delivering AI Growth Zones, the government also highlighted planning reforms as being one of the central reforms needed to drive the development of data centres.

Consequently, on 8 January 2026, data centres were brought into the Nationally Significant Infrastructure Project (NSIP) regime through the Infrastructure Planning (Business or Commercial Projects) (Amendment) Regulations 2026. Previously, data centres were determined under the Town and Country Planning Act 1990, which left decisions in the hands of local planning authorities (LPAs) and local councillors. In practice, this resulted in inconsistent determinations and a substantial number of refusals, which has been undermining the government's national digital infrastructure ambitions.

Under the new regulations, it is important to note that data centres will not automatically be treated as NSIPs. Developers may choose to apply for a Section 35 Direction under the Planning Act 2008, allowing a project to be considered through the Development Consent Order (DCO) process rather than by a LPA. Given that DCO applications are determined by the Secretary of State, the recent climbdown by MHCLG over the failure to properly consider environmental mitigation could be construed as an ill omen of how effectively the new regulations will fast track the building of data centres in practice. The time taken for DCO applications to gain consent has been increasing in recent years, with the average time to obtain a decision in 2024 being 3.6 years, but the government is hoping the Planning and Infrastructure Act will start to bring this back down.

At present, developers remain in the dark as to what criteria data centre applications will be assessed by, as the sector now awaits a new National Policy Statement (NPS), which is expected to clarify how data centre need, environmental impacts, and community considerations should be weighed in the planning balance.

Our thoughts

Data centres face growing scrutiny over electricity consumption, water usage and carbon impacts. Whether the forthcoming NPS will favour environmental protection or emphasise the strategic importance of data centre delivery remains an open question. Given the government's focus on AI infrastructure, it seems unlikely that they would continue to allow development to be consistently blocked by environmental concerns (as is currently the case at the local level), as this is precisely one of the main reasons data centres have been classed as CNI and brought into the NSIP regime.

It is worth pointing out that the current overarching NPS EN-1 already has a 'Critical National Priority' provision that gives projects a presumption of importance over other considerations like environmental mitigation, such that "residual impacts are unlikely to outweigh the urgent need for this type of infrastructure”. It seems likely that a data centre NPS will contain similar wording in order to usher projects as seamlessly as possible through the planning process.

The government is also considering reform to the demand connections system (that permits energy users to connect to the Grid) in order to address the surplus of demand, largely driven by the growth of data centres (see our article here where we discussed this). Developers of data centres therefore need to keep an eye on, not only how the government intends to position data centres in the hierarchy of planning concerns, but also how and when they will be able to connect to the Grid and whether this, as with the planning regime, may be about to change.

At Foot Anstey, we regularly advise clients on all stages of their infrastructure projects, including company structuring and financing, land acquisition, planning advice, applications for grants and subsidies, advice on grid connection, negotiation of land and supplier contracts, and dealing with disputes that may arise. If you would like to discuss new or existing developments, please do get in touch with us.