Draft Infrastructure Planning (Business or Commercial Projects) (Amendment) Regulations 2025
(Limited Text - Ministerial Extracts only)
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The Minister for Housing and Planning (Matthew Pennycook)
I beg to move,
That the Committee has considered the draft Infrastructure Planning (Business or Commercial Projects) (Amendment) Regulations 2025.
It is a pleasure to serve with you in the Chair, Dr Murrison—for the first time, I believe. The regulations were laid before the House on 15 October.
The Government have identified data centres, the buildings that store much of the data generated in the UK, as essential infrastructure that is necessary to support, grow and develop the UK economy and that is integral to delivering the UK industrial strategy. As hon. Members know, data infrastructure now underpins almost all economic activity and innovation, including the development of AI and other technology. It is increasingly critical for public service delivery and how citizens interact with one another and the state. For those reasons the Government formally designated data centres as a sub-sector of communications in the list of critical national infrastructure in September 2024—a recognition that their loss or compromise could severely impact the delivery of essential services or have a significant impact on national security, national defence or the functioning of the state, as is the case with other CNIs: energy, water, transport and other sectors.
The Government are committed to ensuring that the planning system effectively facilitates development to meet the needs of a modern economy, including supporting essential digital infrastructure such as data centres. In July last year we consulted on how the national planning policy framework could better support economic growth in key sectors, given their importance to our economic future. In response to feedback from a wide range of stakeholders we announced plans alongside the publication of that revised NPPF in December last year to enable certain large-scale projects within knowledge, creative, high technology and data driven industries to be directed into the nationally significant infrastructure projects consenting regime process. These regulations deliver on that announcement by prescribing data centres as a type of business or commercial project that may be directed into the NSIP consenting regime. In effect, they add data centres to the existing nine prescribed projects set out in the schedule to the Infrastructure Planning (Business or Commercial Projects) Regulations 2013.
The inclusion of data centres as prescribed business or commercial projects means that certain proposed data centre projects are capable of being directed to proceed through the NSIP consenting process under section 35 of the Planning Act 2008. It is important to stress that the regulations we are debating today do not require any or every proposed data centre project to proceed through the NSIP route. The regulations will provide an opportunity for developers of certain proposed data centre projects to choose, should they wish to do so, to request to opt in to the NSIP consenting process. Circumstances where a developer may wish to make such a request include, to provide the Committee with just a few examples, where a proposal also involves associated energy generation; where it may be particularly large or complex; or where it could benefit from the one-stop shop approach that the NSIP consenting process provides for. To be clear, sections 35 and 35ZA of the Planning Act 2008 would require developers of a data centre project to submit a qualifying request to the Secretary of State. They may direct a data centre into the NSIP regime only if they consider that the project or proposed project is of national significance, and that it meets the other requirements set out in section 35 of that Act.
The Department for Science, Innovation and Technology is drafting, as we speak, a national policy statement for data centres, which will set out the parameters, thresholds or other relevant factors that may indicate whether a particular data centre development proposal could be regarded as one of national significance and so capable of meeting the requirements of section 35. Similar to national policy statements for other sectors of infrastructure covered by the NSIP regime such as energy, transport and water, the NPS that DSIT is currently preparing will also set out a national policy and the policy framework for decision making for data centres. This will provide greater certainty to applicants and decision makers alike.
DSIT is aiming to publish a draft NPS for public consultation and parliamentary scrutiny in accordance with the requirements of sections 7 and 9 of the 2008 Act shortly after these regulations are proposed to come into force. The published draft NPS may also be considered as an important and relevant matter in the decision-making process for any data centre project that has been directed to proceed through the NSIP consenting process. In the meantime, the written statement that was published alongside the existing 2013 regulations states that the Secretary of State will consider “all relevant matters” when considering whether a project is of national significance. That incudes considering whether the project is of a “substantial physical size”, is likely to have a “significant economic impact” or is important for driving growth in the economy.
To conclude, what we are discussing today is merely the mechanism by which certain data centre proposal zones deemed to be of national significance may choose, subject to the Secretary of State’s decision, whether to give a direction to opt in to a different planning route—the NSIP consenting route—rather than going through the Town and Country Planning Act 1990 planning process. The legislation enables developers to request that their proposals be considered under the NSIP regime, subject to the Secretary of State’s direction.
We are taking the proposals forward on the basis of receiving an overall favourability of responses to our consultation on them, and because of the important role that such data centres have in supporting the Government’s economic growth mission. I hope that the Committee will agree that the changes are sensible and proportionate steps in ensuring that the planning system is flexible enough to adapt to emerging priorities.
Matthew Pennycook
I thank the shadow Minister and the Liberal Democrat spokesman for that series of points and questions, to which I will do my best to respond—I note that some of them stray outside of my departmental responsibilities. We are talking specifically about putting in place necessary changes to the planning regime to allow formal requests to be made for data centres to be considered under section 35. Other things, such as the spatial plans that the Liberal Democrat spokesman just mentioned, are matters for the Department for Energy Security and Net Zero, and the NPS is obviously a matter for Department for Science, Innovation and Technology. However, I will make sure that the relevant Ministers are made aware of the comments of the hon. Members.
I will start by responding to the points made about the draft NPS. That NPS is still in development and testing. Given the time that it may take to comply with the statutory requirements for designation of a new national policy statement, it was considered appropriate in this instance to lay the draft SI in advance. As I made clear, we intend to publish the NPS in draft form near the time at which this SI will come into force. The laying of the SI last month gives an indication to the sector—and the Government think that this is important—and to prospective data centre applicants at a very early stage in their development, who may be interested in using this route, that we are moving forward on delivering against the commitment we made last December. It also recognises the importance that we give to the delivery of data infrastructure more generally.
DSIT aims to publish the draft NPS after these amending regulations come into force, so it is possible that it will be published before any requests for a data centre to be directed into the NSIP consenting regime either come forward or need to be decided. That would mean that the draft NPS would be considered as an important and relevant matter in the decision-making process for any data centre project that is subsequently directed to proceed through the NSIP regime.
The shadow Minister mentioned the changes that we are making through the Planning and Infrastructure Bill. We will have a significant amount of time tomorrow to discuss amendments to that Bill. As the shadow Minister will know—and as the Opposition Whip, the hon. Member for Ruislip, Northwood and Pinner will know, having been involved in scrutinising the Bill in Committee—we intend to publish pre-application guidance on what developers that want to submit a development consent order through the NSIP route should do. The consultation on the scope and design of our proposed guidance closed on 27 October. The responses to that consultation will inform the development of the guidance.
Applicants will be expected to use engagement to deliver high-quality applications. There will still be an expectation of high-quality, early, meaningful, and constructive engagement and consultation to take place with those affected, but we do believe—we had extensive arguments about this in the Bill Committee—that we need to move away from the rigid statutory requirements to this more flexible, guidance-led approach, which will improve flexibility for applicants to take into account community views and to respond appropriately to get the better outcomes. As we have discussed and as I have said many times, the current system is having a number of perverse outcomes that are not leading to beneficial results for that industry.
Lewis Cocking (Broxbourne) (Con)
I should declare that I have a data centre in my constituency under construction. It went through the normal planning route. Will the Minister confirm to the Committee that if someone wants a data centre to go through the nationally significant infrastructure project regime, the local planning authority and local people will still be able to have a say on the application?
Matthew Pennycook
That is a fair question and the hon. Gentleman pre-empts the next point that I was going to make, specifically about local accountability. This is important. The NSIP consenting process provides substantial opportunity for interested parties, including local communities and local authorities, to have their say on proposals going through that process.
Under the Planning Act 2008, local authorities are invited to submit a local impact report giving details of the likely impact of the proposed development on their area, which the Secretary of State must have regard to when deciding the application. The examination process, which all NSIP applicants need to go through, provides the opportunity for local communities, interested parties and statutory bodies to make representations and for them to be considered by the examining authority in examination of the application and in the subsequent report that will be made to the Secretary of State for a decision on whether to grant development consent.
Peter Fortune (Bromley and Biggin Hill) (Con)
This is a little parochial to London, but can we ensure that local authorities in London are consulted, along with the Mayor of London, so that their power to decide is not usurped by the mayor?
Matthew Pennycook
As I said, the NSIP regime provides for local communities, local authorities, other statutory consultees and stakeholders to input into that process. In a similar way to how a local planning authority undertakes a period of consultation to enable views on a planning application to be expressed, the examination process under the NSIP regime—which all NSIP applications must go through—provides the opportunity for local communities and interested parties to make representations to be taken into account by the examining authority in examination of the application and by the Secretary of State when they come to decide whether to grant development consent.
In the time I have, I should respond to a couple of other issues that were raised. Power usage was a point made by the hon. Members for Orpington and for Taunton and Wellington. Energy and carbon footprint are a key issue for data centres. The sector operates under a climate change agreement to encourage greater uptake of energy efficiency measures among operators. The UK has committed to decarbonising the electricity system by 2030, subject to security of supply, and data centres will increasingly be powered by renewable energy resources.
Newer, purpose-built and modern data centres can provide compute at a higher efficiency than older, converted data centres, in terms of the amount of power they draw on, but data centres will play a major part in powering the high-tech solutions to environmental challenges, whether that is new technology that increases the energy efficiency of energy use across our towns and cities, or development and application of innovative new tech that takes carbon out of the atmosphere. We are, however, very conscious that data centres draw on quite a significant amount of firm power, and the Government will take that into account in making decisions as to whether individual applications go through.
Lastly, I should address heat, which the hon. Member for Taunton and Wellington rightly mentioned. He is absolutely right to say that data centres produce a significant amount of heat. The technology exists to capture that heat and to use it in district heating networks, or to meet significant demand. There is potential, therefore, for the heat to be captured and used to further benefit than happens currently, but there have already been successful examples—which are worth highlighting—of using data centre heat for hospitals, homes and other uses. One such example is the use of a data centre to heat a local swimming pool in Devon. We will take that into account, as I am sure DSIT did in the drafting of its national policy statement and in its conversations with other Departments. However, I will ensure that the hon. Gentleman’s comments are brought to the attention of the relevant Minister.
Gideon Amos
I intervene simply to place on the record my entry in the Register of Members’ Financial Interests. I recently undertook a study trip to Denmark to look at waste heat. I probably should have put that on the record, but it is in the register.
Matthew Pennycook
I hope the point is well made that, as part of the NPS process and more widely, we are engaging with developers and operators to determine whether the Government should be making further interventions that are necessary and proportionate to encourage the take-up of such solutions.
Samantha Niblett (South Derbyshire) (Lab)
In the States, a lot of data centres have had pushback from local communities, which are seeing an increase in their energy bills. We cannot quite work out why. Will the Minister commit to work with me, DESNZ and possibly DSIT to ensure that when data centres are built as national infrastructure—because of this change in legislation—that will not mean that consumers end up paying higher prices for whatever reason? I welcome the focus on using waste heat to benefit local communities, but I feel somewhat anxious about that increase in consumer bills because of the building of data centres.
Matthew Pennycook
I thank my hon. Friend for her question, but she tempts me to stray way outside my departmental responsibilities. Instead, I commit to ensure that the relevant Minister from DESNZ is notified about her concerns and that we all reflect, as a Government, on the point made.
In conclusion, notwithstanding the range of considerations about data centres that we have discussed, I wish to draw the Committee back to what the draft regulations seek to achieve. They are merely an enabler for data centres that might be considered of national significance to be capable—only at the request of developers of such projects—of being directed to an alternative mechanism for obtaining development consent. Applications for data centres directed to the NSIP consenting route will undergo a thorough and robust process. As I said, that will include examination by an independent examining authority where local communities and others can participate and register their views before the Secretary of State decides whether to grant consent. I hope that the Committee will agree that it has considered these amending regulations and will be supportive of them.
Question put and agreed to.