How the UK is Powering Ahead with Infrastructure Growth

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Rachel Reeves says the UK needs to go "further and faster" with innovation (Image: CC BY-NC-ND 2.0 / Deed)
UK Chancellor Rachel Reeves announces plans to tackle “slow planning system” in the UK, ensuring data centres are built faster to support AI-led innovation

Data centres are a gateway to greater innovation and the UK is poised to act, according to UK Chancellor of the Exchequer Rachel Reeves.

Speaking in Oxfordshire on 29th January 2025, the Chancellor unveiled plans to grow the UK economy to cement the country’s position as a catalyst of change and ultimately drive economic growth for businesses and everyday working people.

“Investments and innovations go hand in hand”

Rachel Reeves, UK Chancellor of the Exchequer

Part of these plans include confronting the planning system in the UK, which includes speeding up the delivery of new data centres to build more infrastructure and support AI-led developments.

“Data centres are driving the AI revolution,” Rachel Reeves said, emphasising that there is an urgent need for the UK to “speed up infrastructure delivery.”

“The Planning and Infrastructure Bill is a priority for this government and it will be introduced in the Spring.”

Building for the future

Rachel Reeves is eager to boost UK infrastructure

The Planning and Infrastructure Bill has been proposed to speed up building application processes and what Rachel Reeves says will “reform our approach to environmental regulation.”

Opening up planning systems in the UK in this way is designed to help build more infrastructure at a faster pace, with the government also changing the rules to prevent builds from being slowed down.

When it comes to data centre development, the hope is that faster planning permissions will lead to faster innovation.

Key moments from Rachel Reeves’ speech:
  • The UK government is investing 2.6% of GDP over the next five years to deliver an extra £100bn (US$124bn) which “catalyses private sector investments” for key industries, including the energy sector
  • The IMF has updated the UK’s growth prospects for 2025, which Rachel Reeves states gives the country the “fastest growth of any major European economy this year”

“Investments and innovations go hand in hand,” Rachel Reeves explains. “I am determined to make Britain the best place in the world to invest.” 

Such news is timely for the data centre industry in the UK, which has recently seen the January 2025 approval of a new 350MW data centre to be built in Hertfordshire. 

When built, DC01UK will be Europe’s largest cloud and AI data centre, boasting up to two million square feet of space and designed to fulfil existing cloud shortfalls. It is also expected to cater to large demand increases expected in the near future, largely associated with AI.

Image: DC01UK

The project was green-lit shortly after the UK government announced its AI Opportunities Action Plan, which outlines economic growth opportunities that AI can offer the country.

Data centres are a critical aspect of this strategy, with the new plan setting out long-term plans for AI infrastructure needs and how it can be more sustainable and secure.

A new ‘AI growth zone’

In her speech, Rachel Reeves also mentioned a new “AI growth zone” that has been proposed at Culham, the headquarters of the UK Atomic Energy Authority (UKAEA). 

Subject to agreements, the private-public partnership is designed to deliver benefits to the local area, the UKAEA’s fusion energy mission and the UK’s wider national AI infrastructure. The proposal is designed to support the rapid rollout of data centres that can support the development of AI-led innovation.

Also a critical part of the UK’s AI Opportunities Action Plan, Prime Minister Keir Starmer explained in the report: “The government and UKAEA will seek a private-sector partner who would develop one of the UK’s largest AI data centres, beginning with 100MW of capacity and with plans to scale up to 500MW.”

UK Prime Minister Keir Starmer has been vocal about his support for new data centre projects

In her speech, Rachel Reeves said on AI that the UK needs “to go further and faster,” stating that investing in industries will ultimately “define our success.”

She said: “Britain should be the best place in the world to be an entrepreneur.”

Future plans will see the UK government working to support business leaders to become more agile and support smaller businesses to drive greater growth. Rachel Reeves stated that these findings will be published in March 2025 and examine how growth can be further driven across multiple business sectors.

“We will work with the private sector to deliver the infrastructure that our country so desperately needs,” she said.

Eager to recognise the potential of AI and other emerging technologies, the UK government has also announced plans to establish a growth corridor between university hubs Oxford and Cambridge.

“This area has the potential to become Europe’s Silicon Valley,” the Chancellor said.

In order to support this, the government has pledged to update transport links and new towns to catalyse innovation and support those living alongside it.


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