Planning reforms proposed for nationally significant gigafactories, data centres and laboratories

The government confirmed plans to do so in a written answer published in January. Last September, Pinsent Masons made a number of recommendations in response to the UK government's NPPF proposals which included reforms to the NSIP regime that allows development consent orders (DCOs) to be made for those business and commercial projects seen as ‘nationally significant’. The aim of the proposals was to streamline the planning process for large-scale developments, so accelerating economic growth across England.

The NSIP regime, established under the Planning Act 2008, was initially designed to fast-track the approval process for large-scale energy, transport, water and waste infrastructure projects deemed crucial for national development. But it was extended in 2013 so that certain ‘business and commercial projects’ of substantial size and significant economic impact could also be directed into and consented under the regime. This includes offices, sports and leisure and tourism projects. However, since then, only four directions have been given, and no business or commercial project has got as far as being consented under the NSIP regime.

As part of its July 2024 consultation on the NPPF, the government consulted on a proposal to add explicitly data centres, gigafactories and laboratories to the list of types of business and commercial development which could be capable, on request, of being directed into the NSIP regime by the relevant Secretary of State. 

In its response to the consultation in September, Pinsent Masons noted support for the proposal to prescribe data centres, gigafactories and laboratories as types of business and commercial development which could be capable of being directed into the NSIP regime, although added: “However, these types of business and commercial development are already capable of being directed into the NSIP regime. Our understanding of the 2013 ‘business and commercial projects’ regulations and related policy statement is that they are effectively already prescribed projects and therefore subject to the direction-giving power. We suggest that those regulations are reviewed and updated, along with the policy statement, so that these projects are all included specifically rather than generically, for certainty and clarity. We would include in this review regional, or wider, networks of digital infrastructure and networks of charging facilities for electric vehicles”.

In December 2024 the government responded to feedback and introduced changes to the NPPF recognising the need for planning policies to facilitate development of gigafactories, data centres and digital infrastructure. The government also announced that it would pursue its proposals to prescribe data centres, laboratories and gigafactories for the purposes of the 2013 business and commercial projects regulations due to the overall favourability of consultation responses and the importance of these types of development to supporting the government’s economic growth mission. January’s written answer has now confirmed that secondary legislation will be introduced later this year to list data centres, gigafactories and laboratories explicitly as business or commercial development projects that can be directed into the NSIP consenting regime on request.

It makes sense to update the regulations to recognise explicitly those business and commercial projects such as laboratories, gigafactories and data centres that are now being developed in the modern economy, so that there is greater potential for nationally significant proposals to take advantage of the NSIP business and commercial projects consenting regime.

The government said that it is also giving careful consideration to whether it limits the direction-giving power to developments over a certain size, to ensure it strikes the right balance between the different consenting regimes. In our view, the scale should be determined by the size of the buildings and other facilities and genuinely relate to proposals that can make a reasonable contribution to the evidenced national need. The 2013 policy statement already includes indications of national significance with reference in particular to the scale and size of proposed development. These should be reviewed to check that they are still considered appropriate as a ‘rule of thumb’ or starting point.

Changes are expected to be made in the summer, along with a revised or complete replacement policy statement setting out the government’s position on those business and commercial projects that are capable of using the NSIP consenting regime.

Given the government’s infrastructure and growth agenda, there is real potential for the business and commercial projects aspect of the NSIPs regime to be successfully relaunched and put to work to consent nationally significant business and commercial projects. This is about finally selling the benefits of the NSIP consenting regime beyond traditional infrastructure projects, particularly for co-located business and commercial projects having functional dependencies and economic synergies such as data centres with energy generation, cooling water supply and heat offtake facilities.

Meanwhile, consultation has  just closed on the proposals in the January planning reform working paper streamlining infrastructure planning for a number of general changes to the NSIP regime, which are expected to be taken forward through the Planning and Infrastructure Bill due be published later this month. The changes include:

• a more agile system for reviewing and approving national policy statements;
• a suite of procedural changes to effect faster decisions under the NSIP regime, including to pre-application and consultation processes;
• some reforms to the procedures governing the judicial review of decisions to approve NSIPs; and
• a more flexible approach to what projects qualify as NSIPs and the potential for NSIPs to be directed out of the regime so they can use an alternative consenting pathway.

These changes to the NSIP regime are vitally important, not just for conventional infrastructure projects but if the NSIP regime is to be attractive to those proposing eligible business and commercial projects. Streamlining of pre-application and consultation processes will help and can be done in a way that still ensures those with interests in a project can provide input, but the government needs to be wary that any changes are genuinely simplifying or removing, rather than adding to, process and requirements. An overly process-driven approach is what has blunted the effectiveness of previous NSIP reforms.