Powering Places: Integrated Planning Strategies for Datacentres & Communities

The demand for data centres is predicted to grow at between 10-20% CAGR a year for the next five years with the boom in transactional cloud storage, high performance computing and generative AI driving much of the need. The government has taken an ambitious approach to building out the UK’s data centre capacity in its Industrial Strategy, showing that it intends to address regulatory frictions and create an attractive investment environment for both companies and local areas.

Very recently the Chancellor of the Exchequer has made a clear commitment to stopping UK technology and scientists from going abroad. There has been a previous statement regarding AI Growth Zones being positioned as pivotal in achieving that vision and there is a clear intention to tackle the barriers to investment in AI data centres: namely slow and inconsistent planning processes and delays getting access to power. The success of AI Growth Zones will be measured not only by the infrastructure they deliver, but by the growth, skills, and opportunities they create for people and places across the UK.

There has been a commitment to accelerating grid connections and providing additional planning capacity. The former is essential due to the oversubscription to the current grid system whilst the latter is needed as Local Planning Authorities (LPAs) often lack the expertise to assess large and complex AI data centre projects. One solution is to ensure that only the most strategic and credible projects are taken forward.

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The scale of the challenge.

There is however a challenging backdrop to these ambitious aspirations to build out the UK’s data centre capacity. A recent report from the London Assembly’s Planning and Regeneration Committee found the capital’s grid is coming under strain from growing electricity demand, including from data centres. The committee warned of the growth of energy-intensive data centres delaying new housing in London with the rapid expansion of data centres in London delaying new developments just as the capital’s housing crisis is at its worst. In 2022, parts of the network reached full capacity in certain areas, temporarily halting new housing developments.

Investigations into the causes of these delays revealed that the rapid development of data centres in west London and along the M4 corridor meant that the distribution network serving the area was starting to run out of electrical capacity for new developments.

It warned that London’s long-term electricity needs, which are forecast to grow by at least 200%, will require long-term strategic planning to avoid further grid constraints and delays.

As well as capacity issues, there are concerns over damage to green belt land, and despite  applications being locally rejected, several sites have received the ‘green light’, pushed  through by the UK government to achieve their goals for AI growth zones. In June 2024, Buckinghamshire Council rejected plans for a 775,000 sq ft data centre, over concerns it would damage the green belt environment. However, last year the government gave the green light to the £1bn development at the Woodlands Park landfill site at Iver in Buckinghamshire. But campaign groups Foxglove and Global Action Plan brought a case against the government and the developers at the High Court, arguing that the electricity demands of the facility were not properly considered. In the end the government accepted it wrongly granted planning approval for this data centre beside the M25.

What objections? An analysis of recent planning applications.

Given some of the real challenges being faced across the country regarding planning consents, our Societal Insights team undertook an analysis of 33 data centre planning applications that were considered controversial or experienced planning difficulties. We wanted to understand the complexity that planning committees and operators face when navigating the concerns of communities, local infrastructure constrains and the aspirations of key stakeholders in the planning process.

Firstly, we found that, for these 33 data centre applications, the average time to secure planning consent was 490 days, although there was significant variation, with the longest planning time being just over 5 years. Given the Government’s commitment to provide additional planning capacity to support Local Planning Authorities and to fast-track projects which have secured planning permission and appropriate financing to enable the acceleration of grid connections, this is a concerning finding.

In terms of objections from the public,

32 applicants faced considerable numbers of objections on environmental grounds,

26 on poor community engagement,

26 based on personal feelings around the application,

25 on design,

23 on energy and power supply,

20 on impacts to existing local infrastructure, and

18 on the lack of benefit proposed to the community.

When we looked at the relationships between planning time and types of objections, we found that objections related to the longest planning delays were centred around lack of community engagement and no clear tangible community benefit, design issues, lack of local infrastructure, and concerns round energy and power supply.

The quotes below were representative of these objections-

“Fears over limited positive impact in terms of employment and community benefits”

“Consultation process ignored strong public voice and there was insufficient public consultation”

“High energy usage not mentioned in proposal and lack of detail on how it will impact power supply”

“Lack of information provided to the public and a lack of transparent consultation with our community”

For the 9 data centre applications that were rejected, all of them faced rejections due to a failure to meet local policy requirements, 7 due to the location of the site being inappropriate, 5 due to concerns round energy and power use, 4 due to perceptions that the data centre will harm the local area and not provide adequate benefits, and 3 due to a lack of transparency in applications. These are showcased by the quotes below.

“Lack of significant renewable energy to power the development.”

“Benefits do not outweigh the harm of the development.”

“Insufficient capacity of the grid and lack of fixed connection agreement to connect to the grid.”

“Financial contribution towards supporting improvement of cycling and walking routes is required but not committed to.”

“Proposed development, by virtue of its design, bulk and scale fails to relate to surrounding context or respect the features that contribute to the area's character and local distinctiveness.”

In terms of potential community benefits, all 33 applicants offered local employment and some form of local infrastructure but less than half offered meaningful community engagement and only 2 of the applicants mentioned offering a community fund to provide some form of community dividend. In light of some of the findings on objections and reasons for rejection outlined above, a failure to really consider these community benefits can have serious implications for planning success and delays for operators as well as leaving residents in the dark about the development and with little or no community dividend through which to understand positive benefits for their communities.

This data points to a significant and growing challenge that needs a real solution.

We know from national legislation that planning and prioritising grid connection are key issues and that the success of AI Growth Zones will be measured not only by the infrastructure they deliver, but by the growth, skills, and opportunities they create for people and places across the UK.

A strategic approach to renewable energy and community dividends.

We believe that data centres do not need to be pitted in competition against local communities for access to resources; rather they can enable other opportunities for communities instead. The placement of data centres, and defining their relationship with the communities around them, has the potential to improve health outcomes, create jobs, support research centres and draw in high value data industries.

But for this to be realised there needs to be a reset in our approach to how we communicate and engage with local communities and stakeholders, how we cocreate a real tangible community dividend for communities and how we ensure that renewable energy is a key part of planning strategy going forwards. Our previous industry research shows that an anonymous grey box cannot be an active participant socially.

To address some of these challenges, the government wants to bolster its offer on skills and support for AI adoption within AI Growth Zones specifically. They are investing an initial £5 million per AI Growth Zone, working within local areas to design tailored schemes to realise local economic benefits from Growth Zones and boost AI adoption in local communities. If the government is to deliver on its promise that these new packages ensure AI Growth Zone hubs of skills, innovation and opportunity for local communities, then the way that we understand the needs of local communities, and work in partnership with them, is going to be crucial in delivery.

Last year, our Social Charter started to frame exactly how this can be achieved. We suggested that data centre operators need to understand the needs of the communities in which they are located including improved education and awareness of the potential of data centres and clear support for local social infrastructure. We posited that operators need to actively contribute to enhancing local skills and economic growth, improve local public health and design in equity through co-creation with local communities.

Our Social Charter is more than an aspiration for what socially conscious and community-led data centre development and management could look like. It is the template for operators to negotiate planning by showing themselves to be a catalyst for local regeneration and renewal.

This transparency and community dividend need to be delivered in conjunction with renewable energy infrastructure. A recent report called for a specific data centre policy in the London Plan and for all London boroughs to have completed a local area energy plan to inform their next round of local plans.

To address these challenges going forward, datacentres are going to need integrated renewable energy and social and community strategies that really involve local communities in ensuring that data centres can offer the greatest contribution to those communities. These must include transparent decision-making and renewable energy governance so that operators can reassure planning committees and communities that they will contribute to essential infrastructure that maximises the economic, environmental and social benefits for communities.

Dr Carl Walker

Head of Societal Insights SOCIETAL INSIGHTS TEAM

Dr Carl Walker is a chartered psychologist with over 25 years’ experience in academia, community engagement, community coproduction of wellbeing services and infrastructure, local authority strategic development and industry. Having arrived at Hoare Lea in 2024, Carl is working on a number of projects to bring a human and community-centric understanding to our approach. Carl is part of the Social and Human Value service alongside the Societal Insights Unit.

Carl is a community psychologist, a member of the British Psychological Society National Community Psychology Section committee and a visiting lecturer at the University of Brighton. His work involves leading action research projects on community wellbeing and coproducing community initiatives to address mental health and wellbeing needs.

He has used a range of social science methodologies to engage in collaborative, multi-stakeholder initiatives in the fields of health, mental health and wellbeing, disability, care and social infrastructure. He has published widely in the field of mental health and community activism with 9 books and over 70 peer reviewed publications .

Start a conversation: CarlWalker@hoarelea.com

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