Digging into the Labour Party’s election manifesto datacentre planning reform pledge

The Labour Party’s election manifesto includes a pledge to remove the planning barriers that have halted datacentre developments and, in turn, stunted the UK’s economic growth.

According to a report by The Telegraph in the days leading up to the publication of the full manifesto on 13 June, the Labour Party wants to reclassify datacentres as “nationally significant infrastructure projects”.

This designation is reserved for large-scale projects, such as creating new power stations and transport networks, and would mean initial permission to build new datacentres would no longer be granted by local authorities.

Instead, datacentre developers would submit details of their proposed builds to the Planning Inspectorate, who would then examine the plans and refer them to the secretary of state to decide whether or not they can proceed.

Presently, the secretary of state is typically called on to decide if a datacentre build can proceed in situations where a developer has lodged an appeal against a local authority that has denied consent for the project.

Fast-tracking the development of datacentres in this way will no doubt be welcomed by developers, which have previously had to scrap or delay projects due to planning disputes. The proposal also comes at a time when demand for colocation capacity remains high.

According to a market report released by real estate consultancy firm CBRE in May 2024, available datacentre capacity is “dwindling year-on-year” in London but demand is “likely to grow” as facilities that can handle more compute-intensive, artificial intelligence (AI) workloads become increasingly sought after.

“Accommodating those requests is increasingly difficult for providers given the lack of capacity, shortage of available power for new facilities, and small number of artificial intelligence-ready datacentres in London,” said CBRE.

Labour’s statement of intent

During an interview on 13 June with BBC Radio 4’s World at One programme, Peter Kyle, Labour’s shadow secretary of state for science, innovation and technology, said the Labour Party is committing to a “strident reform” of the planning regulation system to ensure datacentre developers can meet this demand.

He also said ensuring datacentre developments can proceed unimpeded would be a “national priority” for the Labour Party.

As an example of the type of development Labour would be looking to greenlight, he pointed to a case from October 2023 that saw a Conservative government minister block a proposal to build a £2.5bn hyperscale datacentre on an undeveloped piece of protected greenbelt land in Iver, Buckinghamshire.

The land in question is within the jurisdiction of Buckinghamshire Council, which blocked the development in September 2022 on the basis that it was an “inappropriate development” that would harm the “character and appearance” of the green belt site and its surroundings.

In response to this, the project’s developers exercised their right to appeal the decision with the Parliamentary under-secretary of state for local government and building safety, Lee Rowley, who backed Buckingham Council’s view and dismissed the appeal.

The decision resulted in the government being described as “deranged” in the national media’s coverage of the matter, with the project’s supporters criticising the government for wanting to protect a piece of land that is overlooked by the M25 motorway and neighbours a busy industrial park. 

During his appearance on World at One, Kyle said the Iver datacentre project was “cancelled at the swipe of a pen by a minister” and suggested the outcome of that project would be very different under a Labour government.

“We’re not going to have this,” he said. “We’re going to make datacentres, building new [innovation] labs and building 1.5 million homes over one Parliament a national priority.”

When pressed for further details on why the Labour Party is championing the growth of the datacentre sector, Kyle cited figures that suggest “just one of these datacentres” generates around half a billion pounds for the economy each year.

“One of the key infrastructure challenges we have of the future is going to be managing the compute power, the computing crunching power and all the data storage that needs to happen for a modern economy,” he said. “We are simply too far behind to become a world leader … and we’re behind in building them.”

At this moment in time, Kyle confirmed that Labour does not know exactly how many datacentres will need to be built to make up this perceived shortfall, as that is something the party will need to assess if it succeeds in coming to power in the wake of the 4 July general election.

He did acknowledge that not all of these datacentres will need to be hyperscale in size, as some of them would “fit into urban areas in the space of a city block”, but – regardless of size – they could “generate enormous amounts of wealth for the country”.

He added: “At the moment, we’re retrospectively building these things because we’re too far behind. What we need to do is assess the opportunities a country like Britain has and how we get the infrastructure in place so that our businesses, entrepreneurs and wealth creators can seize those opportunities, [and] that can only be done by a partnership with government and private sector willing to invest.”

The rise of the datacentre

The Labour Party’s recognition of the important role datacentres play in keeping the UK’s digital economy ticking over will no doubt be welcomed, especially in light of past efforts by the likes of UK tech trade body TechUK to raise the sector’s profile.

Mark Yeeles, vice-president of the secure power division of datacentre energy management company Schneider Electric, told Computer Weekly that it was pleasing to see the sector feature so prominently in a political manifesto.

It’s excellent to see datacentres reaching the top of the UK’s political strategy [but there can be] no trade-off between new datacentres and sustainability
Mark Yeeles, Schneider Electric

“It’s excellent to see datacentres reaching the top of the UK’s political strategy and more so in line with both the industry’s growth and new requirements for infrastructure to support the future of cloud, artificial intelligence and UK life science research,” said Yeeles.

However, there are concerns that fast-tracking developments in the name of economic growth could mean the sector’s future growth comes at the expense of the environment, with Yeeles stating there can be “no trade-off between new datacentres and sustainability”.

With that in mind, he said it’s of “equal importance” that new datacentres are built in locations with access to abundant renewable power and where their presence can bring “significant value to local communities” by reusing the waste heat they generate or creating new employment opportunities for local residents.

Along similar lines, Graeme Malcolm OBE, CEO and founder of Glasgow-based quantum computing firm M Squared, said Labour’s commitment to removing the planning barriers to building new datacentres would need to be carefully handled to ensure sustainable growth of the sector. 

“To sustainably increase our computational power, we cannot keep scaling up datacentres in the form they currently exist,” he said. “We need a plan that keeps pace with all the sustainability and environmental issues, alongside transformational technologies such as AI, to find the balance between datacentre creation and the impact on the environment.”

Safeguarding green spaces         

The fact Kyle cited the datacentre in Iver as an example of a project that would be waved through under Labour’s watch is also a concern for industry stakeholders.

Green belt sites are areas of land that are supposed to remain undeveloped to prevent the onset of urban sprawl between neighbouring towns and cities.

Cathal Griffin, chief revenue officer of Scottish colocation firm Asanti Datacentres, said it makes no sense to champion the sacrifice of these green spaces when there are plenty of other suitable alternatives out there, including the use of brownfield land that has been built on previously and is no longer used. 

“Until we have exhausted all the brownfield and decommissioned industrial sites, there may not even be a need to look to greenbelt in the short to medium term,” he said.

And while the availability of suitable sites is often talked about as being a limiting factor for the datacentre market’s future growth, so is access to power, with the pressure the sector’s growth is putting on the National Grid a recurring topic of conversation and reporting for Computer Weekly.

For this reason, Griffin said Labour should be focusing on proposals that would make it faster and easier for datacentre developers to access electricity grid connections, as the waiting time for this can often put projects in jeopardy.

To side-step this, developers do have the option to invest in private wire systems that bypass the public grid and connect datacentres directly to renewable energy sources instead, but they come at a cost, said Griffin.  

“Whilst there is red tape and restrictions around where developers can build, it pales into insignificance when compared to the red tape around using private wires for green energy,” he said.

“I also think we should be backing the upgrades to the national grid to make green power source connections easier and faster. The current wait time is four years,” Griffin added. “This high cost of energy and the complex supply chain is making the UK an uncompetitive place to store your data.”

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