New DCO powers set to ‘amp up’ data centre delivery

The Planning Act 2008 defines Nationally Significant Infrastructure Projects (NSIPs) as large-scale projects deemed of national importance, with the types of projects currently covered including road schemes, large scale solar, wind, rail and nuclear. To date, data centres have not been included but the much-anticipated changes to the National Planning Policy Framework (NPPF) are set to bring a seismic shift to the industry by introducing data centres as NSIPs. 

In 2024, the Ministry of Housing, Communities and Local Government (MHCLG) held a consultation to seek feedback on proposed reforms to the NPPF and wider planning system. The published findings saw respondents frequently agree that investment in growing the UK economy is critical. Their responses showed support for focusing on new sectors and digital infrastructures in the NPPF, including data centres and gigafactories. As a result, the changes expected are set to see such types of projects added to the existing list of NSIP projects. This will make way for faster planning approvals if they follow the current consenting regime. 

Using DCO powers to deliver NSIPs including data centres 

Currently, under the Planning Act 2008, a separate consenting route for NSIPs sees qualifying projects, meeting the required thresholds, needing to seek development consent from the relevant Secretary of State rather than planning permission from the local planning authority. Through this route, any permissions to build and maintain an NSIP can be obtained through a Development Consent Order (DCO). 

A DCO provides planning permission and powers to acquire the land and rights through compulsory purchase to ensure the deliverability of a development. Anyone can apply to have a project decided by the DCO regime as long as it meets the criteria and threshold for an NSIP. It is not yet known what criteria the Government will set for data centres to be considered as NSIPs, but it is likely to be linked to size and capacity based on consultation feedback. However, it was noted in the responses that there was no clear common suggested appropriate scale - with many proposing that it should be the Government’s and/or local planners’ responsibilities - so it will be interesting to see what is announced within the revised NPPF.

Understanding the DCO process 

Based on the current process for obtaining DCO powers, the NSIP scheme would see data centres designed with a planning application prepared in the usual way. During the design stages, engagement with stakeholders including local authorities, statutory undertakers, statutory bodies and landowners provides opportunity to review and comment on the scheme, allowing for potential objections to be resolved at an early stage. At the same time, negotiations can commence to acquire land and rights required by agreement. Therefore, it is essential to get the right team on board at an early stage, preferably during site consideration to identify land ownership and land issues that might restrict proposals coming forward, as well as advise on the DCO process and how to assemble the correct team.

Timescales for the DCO process can vary depending on the design, preparation for submission and consultation processes that take place ahead of submitting the application. However, once submitted the application will follow fixed timescales, with the examination period taking six months and then up to an additional three months for the examining authority to write its report, with the Secretary of State’s decision expected within the following three months. However, it is noted that a number of DCO decisions have been delayed recently which has seen the Secretary of State’s decision timescale extended. 

Addressing concerns to increase successful delivery 

The DCO process is designed to allow the public, local communities and statutory bodies to be consulted during the design stage. During the MHCLG’s 2024 NPPF and planning consultation, a common theme highlighted concerns about the importance of selecting the most suitable locations for NSIPs, including data centres, and wanting more guidance on what a proposed appropriate site looks like. There were also responses echoing that they weren’t in favour of these uses being built on green belt land. The benefit of this consultation period is that some concerns can be dealt with ahead of the submission through collaboration, increasing the number of approvals for developers.

Once concerns are addressed, the planning inspectorate (PINS) will appoint an examining authority which will then report to the Secretary of State to make the ultimate decision on the proposed NSIP. The size of the examining authority is usually determined by the scheme but can range from one to five people. If successful in obtaining consent for the DCO, the developer will receive planning and powers to compulsory acquire land and rights if it has not been possible to reach an agreement. Any landowner subject to compulsory acquisition will be entitled to compensation under the compulsory purchase regime and the compensation code. 

Why is this a game changer for data centres?

Typically, dealing with multiple landowners can create challenges but compulsory purchase powers can be a powerful tool to remove this barrier, especially for large-scale development or infrastructure projects. By streamlining and simplifying the process of acquiring land from multiple landowners, developers can avoid lengthy negotiations and project delays. Similarly, compulsory acquisition ensures that NSIPs serving the public good can proceed while, at the same time, following a structured and legally backed process which ensures transparency for all parties. This very much aligns with the feedback from the MHCLG’s 2024 NPPF and planning consultation and, therefore, listing data centres as NSIPs is a positive move towards increasing their development and delivery. 

Furthermore, planning permissions for NSIPs are decided by the Secretary of State following a report from an Examining Authority. This avoids local politics influencing decisions, by placing projects under a planning regime decided at a national level and keeps the system fair and objective for developers who are seeking land opportunities for such large-scale developments. Plus, as there is an increased consultation period at the front end of the scheme, concerns can be raised early and changes and/or mitigation put in place to deal with local concerns. 

Finally, compulsory acquisition through DCOs removes the need for NSIPs to be in very close proximity to power, telecommunications and water as they support with securing easements for transmission lines and facilitating network expansion by expanding the power grid to serve new areas. Not only does this alleviate concerns about the amount of resource needed but also opens up more land opportunities for NSIPs. 

Therefore, the proposed amendments to the NPPF are only likely to ‘amp up’ the number of approvals, speed up planning permissions for developers and turbo charge the delivery of the additional data centres needed to support the UK economy.