Labour to Override Councils for Data Centres on Green Belt to Boost AI Industry

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Labour is set to override local councils to construct data centres on the green belt as Sir Keir Starmer’s Opposition seeks to enhance the UK’s artificial intelligence sector.

Peter Kyle, the shadow science, innovation, and technology secretary, is considering designating data centres as nationally significant infrastructure projects. This move would enable developers to circumvent opposition from local residents.

The UK faces warnings of a data centre shortage to meet the rising demand for cloud computing and AI. Easing planning restrictions is expected to lead to more applications for data centres on the green belt, particularly around the west London data “corridor”, the largest data hub globally outside the US.

Industry experts argue that brownfield sites on green belts are some of the few viable locations for large modern data centres needed to support urban populations. By classifying these projects as nationally important, planning decisions will be made by ministers instead of local councils.

Last year, plans for the UK’s largest “hyperscale” data centre with a proposed £2.5bn investment were blocked due to green belt protections, partly because it would spoil views from bridges over the M25. The developer criticised the decision as “green belt theology”, and others highlighted the need for planning reform.

Mr Kyle recently met with major data centre investors on the US West Coast, including Microsoft, Amazon, and Oracle. The difficulties in securing planning permission in Britain were a key concern raised, particularly by Microsoft, which is heavily investing in AI infrastructure.

Microsoft and Google have both announced new UK data centre projects in the past year, but the cumbersome planning process remains a significant industry frustration. Once built, large data centres typically provide hundreds of construction jobs and a smaller number of permanent positions. They are crucial for high-powered AI services, which Labour aims to leverage to reduce NHS waiting times and enhance public services if elected.

Labour is increasingly focusing on technological opportunities amid spending constraints. Darren Jones, the shadow chief secretary to the Treasury, is collaborating with Mr Kyle and Pat McFadden, the party’s national campaign coordinator, to identify areas for AI deployment across government departments. This effort is part of a broader strategy to boost productivity, especially in healthcare, where spending is expected to rise due to an ageing population.

Pilot schemes are already underway in four Welsh hospitals, using AI to predict patient discharge times accurately. “There really is no money left this time, so they have to take a different approach to public spending,” said a source.

Mr Kyle is expected to meet with technology companies at Imperial College London on Monday to secure support ahead of London Tech Week. The Government had published a consultation in December considering data centres as critical national infrastructure, but it has yet to respond to the evidence collected.

TechUK, the industry lobby group, has called for an overhaul of planning laws to support data centre construction, pointing out that current regulations do not specifically address data centres, which are classed as storage facilities like warehouses.

Nationally Significant Infrastructure Projects (NSIPs), such as airports and power plants, are managed by the Planning Inspectorate, bypassing local authorities. Labour’s shadow justice secretary, Shabana Mahmood, recently stated that prisons would also be designated as nationally important to support their construction.

Even if data centres are not classified as critically significant, Mr Kyle has assured the tech industry that Labour will reform planning laws to facilitate the development of more facilities.

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