According to a new report published today from trade association TechUK, the Data Centre Alliance, Copper Consultancy, and law firm Charles Russell Speechlys, the UK risks losing out on billions in AI investment if it doesn’t take clear steps to unlock data centre development.
The report, How to Make the UK an AI Leader, brings together reflections from some of the biggest data centre developers – as well as planners and construction, engineering, and legal professions – at a recent industry roundtable organised by Copper and Charles Russell Speechlys.
The roundtable, and subsequent report, lay bare the challenges facing data centre development in the UK, and the impacts this could have on investment into UK plc.
Key regulatory barriers – such as energy availability, energy cost, and planning complexity – were identified alongside low public awareness as the main issues hobbling development of data centres in the UK.
Luisa Cardani, Head of Data Centre Programme at TechUK, says, “The insights in this report echo what TechUK and the sector have been advocating for a long time: the UK has the talent, the ambition, and the capability to lead in AI and digital infrastructure, but leadership is not guaranteed. It requires bold decisions, cross-sector collaboration, and a shared national vision.”
Steve Hone, CEO at Data Centre Alliance, adds, “As [a] trade association representing the UK data centre digital sector, we were delighted to be invited to collaborate in the recent roundtable which has culminated in the creation of this report.
“This timely report is an important contribution to the debate and hopefully will act as a catalyst for the action needed to ensure the UK’s digital infrastructure remains world leading.”
The report notes how high energy prices are currently hindering the UK’s global competitiveness in data centres and AI – actively dissuading investment in the UK.
Given the resource-intensive nature of data centres, the report suggests that the industry needs the Government to intervene through targeted subsidies, reducing costs to match energy costs in rival regions like the US and Nordics.
Concerns have also been raised with ‘AI Growth Zones’ being seen as a “silver bullet for the industry.”
Whilst, according to the report, the industry welcomes government support, the current planning framework is seen as “overly rigid” and “risks misalignment with actual demand and repeating past planning mistakes like Slough’s unplanned growth.”
As a response, a new planning use class could allow for flexible, demand-led planning, which would be especially important in the fast-moving AI industry.
Finally, public perception is seen as a critical non-regulatory issue for the sector to tackle, with half the UK’ s population not knowing what a data centre is. Such low awareness leaves the public open to misinformation and a fundamental lack of understanding as to why data centres are critical to a future economy.
The report calls on the industry to engage more proactively on the needs case for data centres with the public, supported by the Government outlining why their development is critical to growth.
Ronan Cloud, Director at Copper Consultancy, argues, “While Grey Belt reforms are beneficial, considerable planning inertia remains. Government should create a dedicated planning use class for data centres at once, distinct from broader industrial uses.
“This tailored classification would increase planning approvals and accommodate future technological developments.”
Kevin Gibbs, Senior Consultant at Charles Russell Speechlys, comments, “Whilst the Government’s AI Opportunities Action Plan commits £2 billion to AI Growth Zones to accelerate infrastructure delivery, there is much more that both the industry and Government can, and should, be doing.
“To truly become an AI leader and unlock economic growth, the UK needs to make a clear and compelling case for data centres. It needs to act now to alleviate some of the barriers.”
