DCA responds to UK Budget
The Data Centre Alliance (DCA) has welcomed the Government’s recognition of the strategic importance of data centres in today’s Budget, while calling for greater urgency in delivering the planning, energy and infrastructure reforms needed to support the sector’s growth.
The Chancellor’s announcements on GB Grid, accelerated electricity connections and the proposed British Data Centre Covenant are positive developments. They recognise the essential role that data centres play in supporting artificial intelligence, public services, economic growth and national security.
However, the DCA believes that the focus must now shift decisively from policy development to implementation.
Data centres were designated Critical National Infrastructure in September 2024. More than two years later, the sector is still awaiting the National Policy Statement intended to provide a clearer framework for planning and development.
During that time, demand for digital infrastructure has continued to grow, driven by AI, cloud computing and the increasing digitisation of the economy. The industry is ready to invest, but projects require certainty over planning, permitting, energy availability and grid connection timescales.
The DCA is concerned that continued delays risk constraining the UK’s ability to deliver the digital infrastructure required to support its own economic ambitions.
A Covenant that supports delivery
The proposed British Data Centre Covenant could provide a valuable framework for responsible development, particularly by establishing clear expectations around community benefits, employment, environmental stewardship and local engagement.
However, the DCA believes that the Covenant must recognise the considerable differences between individual developments and the communities that host them.
A large data centre campus will have different opportunities and impacts from a smaller regional facility. Similarly, the needs of an urban community may differ significantly from those of a rural location.
The Covenant should therefore establish consistent national principles while allowing commitments to be proportionate, locally relevant and measurable.
Importantly, it should help guide planning and permitting decisions, complementing the forthcoming National Policy Statement and existing regulatory mechanisms, rather than introducing another layer of administration.
Turning infrastructure commitments into reality
The announcement of GB Grid and the commitment to accelerate electricity connections are particularly relevant to the sector.
Electricity availability, connection timescales and certainty of delivery are fundamental considerations for data centre investment. The DCA welcomes the recognition that these issues require structural reform.
However, additional investment and new institutional arrangements must translate into tangible improvements for projects on the ground.
The Government’s commitment to provide qualifying critical data centres with improved grid access, alongside opportunities for on-site generation where necessary, is encouraging. The industry now needs clarity on eligibility, implementation and how these measures will interact with existing connection and planning processes.
The time for delivery is now
The DCA is calling for a clear timetable for publication of the National Policy Statement, confirmation of how the Covenant will be implemented, and practical measures to accelerate planning, permitting and grid connections. The UK has a highly capable data centre industry, a strong professional and technical skills base, and significant opportunities to support the next generation of digital services. Realising that potential requires a coordinated approach across Government, regulators, planning authorities and the energy sector.
Venessa Moffat, Managing Director of the Data Centre Alliance, said:
“We welcome today’s recognition of the importance of data centres to Britain’s economic and digital future. The proposed Covenant and commitments on grid infrastructure are encouraging, particularly where they support responsible development and deliver meaningful benefits for local communities.
However, more than two years after data centres were designated Critical National Infrastructure, we are still waiting for the National Policy Statement. The industry has been patient, but we cannot continue to develop new policy frameworks without delivering those already promised. The Covenant must be flexible, proportionate and integrated into planning and permitting. It should make responsible development easier to deliver, not more complicated.
Data centres are essential to the Government’s ambitions for AI, economic growth and national security. The industry has the expertise and appetite to invest. What it needs now is clarity, coordination and decisive action. We welcome the ambition. Now we need to see delivery.”
The Data Centre Alliance stands ready to work with Government, regulators and industry partners to help translate these commitments into a practical framework that supports responsible, sustainable growth.
