Within the first few weeks of the new UK government, we’ve seen signs of potentially massive progress for our data centre sector. Progress was further underscored in the July King's Speech, which set out the UK government’s legislative programme and items of significance to our sector.

Notable for data centre operators, funders and developers were the reforms announced in planning, investment, AI, devolution, electricity, skills and EU relations. 

Planning reforms are aimed at accelerating the delivery of high-quality infrastructure to get Britain building. In an early move affecting data centres, the new government has called in the planning applications for two large data centres, to review past objections. Many huge data centre developments are on planners’ tables around the country, so reforms and increasing local planning team resources could be important. Combined with data connectivity developments, planning reforms may propel UK’s digital capabilities. 

The King’s Speech also set out that investment in industry, skills and new technologies will be encouraged for sustainable UK economic growth. Given AI is already a massive demand driver for data centres, new initiatives could be powerful. There is already a framework to govern UK AI development, including the National AI Strategy, the Centre for Data Ethics and Innovation, the AI Standards Hub and the AI Council. New legislation will govern development of the most powerful AI technology models. Also, just recently, the UK signed a joint statement on the fair working of AI with EU and US agencies.

Sustainable economic growth will also be promoted by an English Devolution Bill giving more power to the metro mayors and combined authorities. New devolved powers, combined with planning resources and reforms could accelerate data centre developments, both at hyperscale and edge scale, in and around metro areas. Business parks developed around such new facilities could be major drivers for UK digital and general economic growth. Immediately exciting areas for data centre development already look like being Greater London, the M25 area, Slough, Greater Manchester and Blackpool, North Yorkshire, North Lincolnshire, Northumberland and South Wales.

Turbocharging UK to clean power by 2030 will be underpinned by the new “Mission Control” centre. A priority for the centre is to speed up the connection of new power infrastructure to the grid for cleaner, cheaper power to businesses. The new publicly-owned clean power company “Great British Energy” headquartered in Scotland is aimed at accelerating investment in renewable energy, such as offshore wind. An onshore wind taskforce is to be established, and solar capacity tripled by 2030. Connection agreements to the restructuring grid will continue to be important to data centre development across the UK.

“Skills England” will be set up as a new partnership with employers and the apprenticeship levy will be reformed. Whilst data centre campuses require operations and maintenance teams, their development and construction teams can be significant and the associated supply chains quite vast. So the new skills system, combined with any business flexibility to spend levy funds on training for the skills they need, could be a major accelerator to the UK’s data centre sector. Lack of skilled workforces is a risk often being managed by UK data centre operators, designers, constructors and funders.

Finally, the King’s Speech set out that the UK’s trade and investment relationship with the European Union is to be improved. Given data centres sit at the core of businesses, any new relationship between the UK and Europe could prove vital. Digital connectivity could further strengthen, enabling the UK to become a major data hub between the US, Europe and the Nordic area.

All in all, July 2024 looks like a turning point for our UK data centre sector. We’re looking for the UK to truly underpin innovation in digital and particularly AI, through a major step change in UK data centre campuses.