Delivering AI Growth Zones: Reducing Barriers for AI Data Centres

On 13 November 2025, the Department for Science, Innovation and Technology published a policy paper on Delivering AI Growth Zones (“AIGZs”), which addresses the changes that were discussed in our previous post. Specifically, it proposes reforms to address the most significant barriers to investment in AI data centres: obtaining planning consent, ensuring timely grid connections and reducing energy prices.

These proposed reforms will apply to AIGZs and deliver on the commitments in the AI Opportunities Action Plan. The paper also contains measures that go further than those in that plan, including streamlining consenting for Nationally Significant Infrastructure Projects (“NSIPs”), consultations on the National Planning Policy Framework (“NPPF”) and a new National Policy Statement (“NPS”) for data centres.

The Reforms

Grid Connections

The paper outlines proposals to tackle the grid-connection backlog. Specifically, the Government will propose a plan to manage speculative data centre proposals within the queue to free up and reserve grid capacity for AIGZs. The Government also proposes to work with Ofgem to develop a “self‑build” approach where this would accelerate connections, potentially allowing AIGZ developers to construct their own high‑voltage grid infrastructure, to be adopted by the network operator or maintained by the developer.

Energy Cost Reductions

The paper proposes a geographic energy pricing support mechanism. The mechanism would reflect constraint cost savings from projects that absorb additional supply to the grid. Consequently, data centres located within AIGZs in Scotland, Cumbria, and the North East would benefit from reduced energy costs.

Please note, both of the above two reforms will be discussed in greater detail within an upcoming Law Now authored by CMS’s EPC Team.

Updated national policy guidance

The Government commits to consulting, within three months, on amendments to the NPPF and a new NPS for data centres. The NPS will provide the policy framework for decisions on data centres consented as DCOs, and will also be a material consideration for data centres consented locally. These policy amendments would set out the need case and locational requirements for data centres while also giving significant planning weight to AIGZs. The Government is also considering awarding Critical National Priority Status to data centres: this would create a presumption in favour of data centre development and align with the approach taken with low carbon energy projects. CNP status would be beneficial in the planning balance where the are residual adverse effects.

Providing additional planning capacity

The paper proposes a national team of AI data centre planning experts that would be funded by a much needed £4.5 million contribution. The experts would provide advice and targeted funding to Local Planning Authorities (“LPAs”) that are considering AI data centre applications.

Protecting land and unblocking decisions

The paper commits to preventing conflicting development and giving investors long-term certainty through use existing safeguarding powers to protect land for AIGZs. Additionally, the Government proposes updates to the Consultation Direction, which requires LPAs to consult the Secretary of State before granting planning permission for certain types of development. This would facilitate referrals to the Secretary of State to exercise call-in powers and could help counter the current trend of recovered appeals for data centres.

Faster consenting for Nationally Significant Infrastructure Projects

Currently, AI data centres are consented under the Town and Country Planning regime. However, the Government is working towards consenting data centres as Nationally Significant Infrastructure Projects (“NSIPs”). Alongside the previously announced redesign of the fast track NSIP consenting process, the paper further proposes that the Government will explore whether cutting DCO determination timelines from 18 months to 12 months is feasible.

Comment

While the Government states these reforms go further than the Planning and Infrastructure Bill to ensure developments within AIGZs move at pace, it remains open to further reforms, including wider reform of call-in powers, informed by engagement with local government and AI Infrastructure Investors. It will also work with devolved administrations to reduce planning barriers across the UK.

Ultimately, as discussed in our previous article, these reforms will be a substantial driver in the widespread deployment of data centres across the UK. Not only will they facilitate the development of AIGZs, but they have the potential to address the key barriers facing data centre development.

If you wish to discuss the content of this article, or would like further information, please contact the authors of this article or your usual CMS contact.

This article was co-authored by Eleanor Addinall, Trainee Solicitor at CMS.