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Datacentre market supports Labour government’s review of blocked server farm builds

New government has wasted no time in lowering planning permission barriers to new datacentre builds, with its disclosure that two previously denied projects are being placed under review

An investment company that had several proposals to build new datacentres in the south of England rejected by local planning officials has welcomed the new Labour government’s pledge to revisit two such projects.

Oxford-based Greystoke Land made headlines late last month, when details emerged that Buckinghamshire Council had rejected a second attempt by the company to secure planning permission for a datacentre development on a patch of protected Green Belt Land in Iver, Buckinghamshire.

According to planning documents, uploaded to the Buckinghamshire Council planning portal on Tuesday 25 June 2024, planning permission for the project was refused because it would “constitute an inappropriate development of Green Belt Land”, and harm the character and appearance of the area.

This was the second time the need to safeguard Green Belt Land had seen Greystoke’s plans to build a datacentre on the site rejected, and Computer Weekly understands the company was – ahead of the change in government – in the process of appealing that decision.

Incidentally, the company had an appeal dismissed by the previous secretary of state after its first bid to secure planning permission for the build was rejected by Buckinghamshire Council.

The company responded to that decision by launching a legal challenge against the secretary of state, but Computer Weekly understands that permission to proceed with that legal action was denied.

However, another of the company’s rejected datacentre builds, a £1bn development it sought planning permission for in Abbots Langley, Hertfordshire, is being earmarked for review by the Labour government, Computer Weekly has learned.

Datacentre projects under review

As detailed in new chancellor Rachel Reeves’ inaugural speech, the Labour government has set its sights on stimulating the UK’s economic growth through a reform of the planning permission system to accelerate the pace of large-scale infrastructure projects.

“Our antiquated planning system leaves too many important projects getting tied up in years and years of red tape before shovels ever get into the ground,” she said.

Alongside the deputy prime minister, Angela Rayner, Reeves said the government is committed to taking the “urgent steps necessary to build the infrastructure that we need”, which will include plans to centralise responsibility for deciding whether large-scale infrastructure projects should go ahead or not. “Decisions on large developments will be taken nationally, not locally,” she said.

Expanding on this point, Reeves said that when Rayner has cause to intervene in the “economic planning system”, the benefits the development will bring will be a “central consideration”, and she will not “hesitate to review an application where the potential gain for the regional and national economies warrant it”.

She went on to confirm Rayner has already committed to “recovering” two planning appeals for datacentre builds in Buckinghamshire and Hertfordshire that were previously denied planning permission.  

The Hertfordshire one is understood to be the Abbots Langley project that the local authority blocked Greystoke from continuing with back in January 2024.

Read more about datacentre developments

Contrary to reports elsewhere in the media, the Buckinghamshire detacentre project Reeves referenced is not a Greystoke Land development, Computer Weekly understands.

In a statement to Computer Weekly, a spokesperson for Greystoke said the company is pleased with the proactive stance the new government is taking with supporting the growth and future development of the UK’s datacentre sector.

“We’re pleased to see what looks like a new and more supportive approach to infrastructure planning in the UK – it’s a breath of fresh air,” the spokesperson said. “Getting datacentres built will boost the UK economy and help Britain maintain its leadership in digital industries.”

In a post on professional social media site LinkedIn, Edward Galvin, CEO of datacentre market-focused analyst DC Byte, said the Labour government’s stance on supporting operators to get their projects over the line represents a great opportunity to raise the market’s overall profile.

“Datacentres are one of the UK’s success stories,” he said. “London is still the second-largest datacentre market in the world after Ashburn, Virginia. We should work with the new administration to showcase our industry as an example of a successful growth story, and communicate the factors that will allow the datacentre sector to continue to flourish.”

A lasting Labour Party commitment

The Labour Party vowed in its pre-election manifesto to remove the planning barriers that have halted datacentre developments across the UK to breathe new life into the economy.

As well as winning the support of investors such as Greystoke, its plans have also secured the backing of UK tech trade body TechUK, with the organisation’s head of datacentres, Luisa Cardani, describing its intentions to shake up the planning rules for large infrastructure projects as a welcomed step forward.

“Recognising the sector’s importance is crucial, especially as datacentre development will be critical to capitalising on artificial intelligence’s [AI] potential,” she said. “With the growth of AI, demand for compute can only increase exponentially as we all rely on datacentre storage and processing power to run our daily lives and businesses. We and our members look forward to working with the new government to help achieve that mission in a resilient and sustainable way.”

John Booth, a datacentre expert from BCS, The Chartered Institute for IT, also welcomed news of the government’s commitment to reviewing the planning permission rules for datacentres, but said the sector’s growth should not come at the expense of the environment.

“[Under this new government] planning permission should include enhanced energy efficiency and sustainability requirements, including the use of recovered heat and replicating existing EU legislation regarding reporting energy and environmental data,” he said.

Additionally, Booth said there should also be a government-led push to locate datacentres outside of London and the South East to ease the pressure these developments put on local electrical grids. “Allowing datacentres to be built on the Green Belt will not be sufficient; significant investment in the grid and distribution networks will also be required,” he said. 

“While placing datacentres near cities makes sense given the amount of time it takes for data to travel from one place to another, the government should also prioritise looking further afield to areas with more space, cooler temperatures and abundant power resources.”

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