Government plans faster approval route for data centres

The UK Government has announced plans to make it easier and faster to develop new data centres, recognising their growing role in supporting the country’s digital economy. The proposed changes would allow certain projects in England to be assessed under the Nationally Significant Infrastructure Project (NSIP) regime, a planning route currently used for major energy, transport and commercial developments.

This change reflects a clear shift in how the Government views data infrastructure. Data centres are now being treated as part of the nation’s core infrastructure, alongside roads, energy and housing. As demand for artificial intelligence, cloud computing and digital storage continues to grow, the Government is seeking to remove planning barriers that have slowed development in recent years.

A new route through the planning system

At present, most data centre developments are handled by local planning authorities. While that works for smaller projects, larger and more complex schemes often face delays and inconsistent decisions. The proposed reform would give some developers the option to seek approval directly from the Secretary of State through a Development Consent Order (DCO). This would provide a single, nationally determined consent for the entire project.

To support the change, a National Policy Statement (NPS) is being prepared. This will define what qualifies as a “nationally significant” data centre and explain how applications will be assessed. The policy is expected to take effect in late 2025 or early 2026 once consultations and parliamentary approvals are complete.

What it means for the property sector

The reform could have far-reaching implications for the commercial property market. Land that has previously been overlooked may now become more valuable if it offers the right conditions for digital infrastructure. Sites on industrial estates or near transport hubs, particularly those with good access to reliable power and connectivity, could attract greater interest from developers and investors.

This potential shift in land value and use is likely to encourage closer collaboration between landowners, developers and technology operators. Existing commercial landlords may explore the possibility of adapting older buildings or underused sites for digital purposes, while developers with experience in logistics or industrial construction may expand into data-led projects.

However, the opportunities come with challenges. Data centres are highly technical and energy-intensive facilities that require careful planning and strong connections to utilities and local infrastructure. Developers will need to balance the potential benefits of the NSIP route with its added complexity, which includes more extensive environmental assessments and wider community engagement.

Balancing opportunity and responsibility

The Government’s decision to prioritise data centres recognises how essential digital infrastructure has become to economic growth. It also reflects an ambition to position the UK as an attractive destination for global investment in technology and innovation.

At the same time, the expansion of this sector will bring new responsibilities. Concerns about energy use, environmental impact and local engagement are likely to play a major role in future planning discussions. Projects that can demonstrate a commitment to sustainability, such as using renewable energy or reusing waste heat, are expected to stand out more strongly in the planning process.

The reform also highlights the growing connection between technology and real estate. For many property professionals, understanding the specific requirements of data infrastructure, from power and cooling to security and connectivity, will become increasingly important in the years ahead.

Looking ahead

The inclusion of data centres in the NSIP regime marks a turning point in national planning policy. Once the National Policy Statement is published, it will give clearer guidance on how large-scale data projects should be assessed and what thresholds they need to meet.

In the meantime, property owners, developers and investors can begin reviewing their portfolios and potential sites with this policy shift in mind. Identifying locations with the right infrastructure and planning potential now could put businesses in a strong position once the new framework is in place.

Data centres are no longer a niche part of the property market. They are becoming central to how the UK builds and sustains its digital future. For those involved in commercial property, this change offers both a challenge and a significant opportunity to help shape the country’s next generation of infrastructure.