Data centre clustering benefits highlighted in ‘grey belt’ planning ruling

Michael Pocock and Austin Smith of Pinsent Masons were commenting after a UK government minister granted developer Greystoke Land Ltd (Greystone) permission to develop a hyperscale data centre and country park on land near Hemel Hempstead in Hertfordshire after its plans were originally rejected.

The local planning authority, Three Rivers District Council, had previously refused to grant planning permission, which would entail a variety of works, from demolition and clearance to construction of new buildings and supporting infrastructure, such as offices, drainage, a car park and roads. Greystoke lodged an appeal, which was ‘called-in’ for consideration by Angela Rayner, the Secretary of State for Housing Communities and Local Government, shortly after Labour won the general election in 2024. The appeal has now been upheld.

One of the main factors considered in the appeal was the need for the development and whether there were any suitable alternative sites.

Baroness Taylor of Stevenage, parliamentary Under-Secretary of State, who made the appeal decision on Rayner’s behalf, said the proposed new data centre would meet a “a third of the need” in the Hemel Hempstead ‘availability zone’ (AZ), adding that “there is a clear and pressing need” for new data centre capacity in the London ‘availability region’ (AR) and the Hemel Hempstead AZ. She said “a failure to provide enough sites to meet the need for new data centres could result in investment being lost to other well-established markets outside the UK”.

In relation to the need, Baroness Taylor said “significant weight” was to be given to this factor when determining whether planning permission should be granted, adding that the fact there are insufficient suitable alternative sites available to meet the need should “carry significant weight” too.

Availability zones or regions comprise one or more data centres in a relatively small area. The proximity of data centres to one another provides added resilience in the event of an outage, because traffic can be diverted more easily from the data centre experiencing the outage to nearby alternatives, to help provide for continuity of services and avoid data loss. 

The National Planning Policy Framework (NPPF), which informs planning decisions in England, was revised late last year to require the benefits of data centre clustering to be factored into planning decisions.

Austin Smith said: “When looking at sites which have the potential for data centre development, a few key things need to be borne in mind, namely: location and business resilience. Opportunities may arise, if there are a number of data centres in proximity to each other, to form an availability zone. The benefits provided by proximity to other data centres should not be underestimated.”

As well as having revised the NPPF, the government is in the process of updating the planning regime applicable to ‘nationally significant’ infrastructure projects (NSIPs) in a move that is expected to further support data centre development.

Another important issue considered in this appeal was whether the land upon which the data centre is proposed to be constructed constitutes “grey belt”. The concept of a ‘grey belt’ – essentially, lower quality areas of green belt land – was established within the NPPF when it was revised late last year. The NPPF now provides for development to take place on grey belt land if certain criteria are met. In this case, the site was not previously developed land. Ultimately, the Secretary of State concluded that the proposed data centre site should be categorised as grey belt and that the development would not fundamentally undermine the purposes of the remaining green belt across the area of Three Rivers District Council’s development plan.

Planning expert Mike Pocock of Pinsent Masons said: “This is yet another important example of a project being consented because it falls within the criteria of ‘grey belt’ – if the site was found to be ‘green belt’ it would very likely have been refused planning permission.  The potential for sites to be classified as grey belt is particularly useful for data centre projects which are quite often located in green belt areas.”

Three Rivers District Council had argued at the appeal that it would undertake its own grey belt assessment.  However, the planning inspector appointed to advise the Secretary of State in relation to the appeal referred to Annex 2 to the NPPF which confirms that this matter can be determined through the decision-making process. Pocock said: “This should serve as a warning to other councils to ensure that their assessments are up to date.”