UK government to allow data centres to use NSIP planning regime

Housing minister Matthew Pennycook confirmed the process had begun by the preparation of draft regulations to include data centres as business and commercial projects eligible to be considered as NSIPs for the purposes of the NSIPs consenting scheme. This followed the government’s response in December 2024 to its consultation on changes to the National Planning Policy Framework in July last year, when it signalled that it would be making this change.

The change could come into effect as quickly as this year as the government looks to push the UK as a major player in the growth of AI.

The NSIPs consenting regime, introduced in 2008, was originally designed for the approval of those energy, transport, water and waste infrastructure projects considered to be nationally significant. In 2013 it was opened up to certain business and commercial projects and in December 2024 the government said that it would be expanding the list of eligible business and commercial projects to include data centres as well as gigafactories and laboratories.

As part of the process, the government said it would be developing a national policy statement for data centres, through the department for science, innovation and technology, to set out what would constitute ‘national significance’ and to say how and when data centres being considered in the NSIPs regime should be assessed and consented.

In a written statement to parliament, Pennycook confirmed the plans.

“Subject to parliamentary time and approval, we hope to make these regulations and for them to come into force later this year or early next,” he said.

“This will then enable developers of certain proposed data centres on request to ‘opt in’ to the NSIP consenting process, provided the Secretary of State thinks that the project or proposed project is one of national significance and the development meets the other requirements set out in section 35 of the act.”

The draft regulations would amend the 2013 business and commercial regulations but they only cover data centres and not also gigafactories and laboratories, as the government appears now to consider that gigafactories and laboratories are in fact already covered by the 2013 regulations.  

This move comes after the government brought forward in April significant changes to its Planning and Infrastructure Bill to further streamline the NSIPs regime. Additional changes were announced earlier this week.

Robbie Owen, an infrastructure planning expert at Pinsent Masons, welcomed the announcement of the draft regulations but cautioned that the sector needed speed and agility. He said: “It is critical that government acts as quickly as possible to make these regulations following parliamentary approval and to put the national policy statement in place. Otherwise, this change will come too late, given the pace of developments in the sector, and data centre developers will have no choice but to continue to try to obtain planning approvals under the conventional planning regime.”

He added: “The government must not let up with its programme of reform of the NSIPs regime more generally, spearheaded by the Planning and Infrastructure Bill, otherwise the regime will not be sufficiently attractive to data centre developers in place of the normal route to planning, in terms of speed and cost.”