Local government response to the sustainability of data centres in the UK

Local government sits at the centre of the UK’s digital, AI and data centre ecosystem. Councils plan for, enable and regulate the infrastructure that underpins digital public services, economic growth and local connectivity, while also holding statutory responsibilities for planning, environmental protection, infrastructure coordination and community engagement. As demand for data centres accelerates, driven primarily by artificial intelligence (AI), cloud computing and national economic priorities. Local government is increasingly at the frontline of the sustainability, infrastructure and public confidence challenges this growth creates.

This response sets out local government’s perspective on the sustainability of data centres in the UK, drawing on evidence from councils across England, the LGA’s programmes, and input from public sector digital leaders through Socitm. It highlights a growing gap between national ambitions for AI driven growth and the place-based realities of delivering the infrastructure required to support it.

From a local government perspective, AI driven demand for data centres presents clear opportunities. Data centres can attract private investment, support high value jobs and anchor wider innovation ecosystems when aligned with local industrial strategies. Councils themselves are increasingly reliant on data centres through expanded cloud adoption and the use of AI enabled technologies to deliver public services. Over 95 per cent of councils are already using AI in some form, and demand for compute and hosting capacity is expected to grow significantly as AI maturity increases.

However, this expansion also presents major sustainability, infrastructure and governance challenges. Data centres place significant and concentrated demands on electricity networks, water systems, land and digital connectivity. Often in areas where capacity is already constrained. Councils report increasing difficulty balancing data centre proposals with housing delivery, climate commitments, environmental protection and wider place based growth priorities. These pressures are compounded by long lead times for grid reinforcement and renewable generation, meaning that enabling infrastructure can take many years to deliver.

A central concern for local government is the lack of transparency and consistency in sustainability data provided by cloud and AI providers. Current corporate level reporting does not provide councils with the site specific, verifiable information needed to assess energy use, water consumption, emissions or cumulative impacts at a local level. This undermines effective planning, procurement, FOI responses and public engagement, and exposes councils to reputational risks as public scrutiny of digital infrastructure intensifies. The absence of standardised disclosure requirements also makes like for like comparison between providers difficult and limits councils’ ability to use procurement as a lever to drive improved environmental performance.

The rapid scaling of AI is intensifying these challenges. While AI is a key driver of new data centre demand, its environmental and infrastructure impacts are not being adequately accounted for in current national planning, regulatory and environmental oversight frameworks. Councils are increasingly being asked to reconcile national AI ambitions with local climate targets and democratic accountability, often without adequate data, guidance or capacity. High profile examples of planning tension, including moratoria and central intervention, demonstrate the risks of pursuing digital growth without strong local partnership and place based evidence.

The response highlights that sustainability is not solely a question of operational efficiency. Emerging technologies such as liquid cooling, heat reuse, renewable energy sourcing, battery storage and modular construction offer real opportunities to reduce environmental impact on the local level. However, in many cases these technologies are not widely adopted and can be prohibitively expensive, particularly when retrofitted to existing infrastructure. Data centres can also support local heat networks, contributing to wider net zero and energy resilience objectives when developments are planned holistically. Councils are already demonstrating leadership in this area through innovative, place based projects, but wider rollout is constrained by legacy infrastructure, location, cost and inconsistent national policy support.

International experience reinforces the need for caution. Evidence from the United States and Ireland shows that uncoordinated data centre expansion can strain water supplies, dominate regional electricity demand and generate significant public opposition. These lessons underline the importance of early public engagement, cumulative impact assessment and strategic spatial planning.

Overall, this response argues that achieving sustainable data centre growth in the UK requires a reset in the way national and local government work together. Data centres and AI infrastructure cannot be planned in isolation from wider digital connectivity, energy, water, land use and climate systems. Councils must be treated as key partners in the design and delivery of national digital strategies, including AI Growth Zones, planning reform and infrastructure investment.

• The Local Government Association (LGA) is the national voice of local government. We are a politically led, cross-party membership organisation, representing English councils. Our role is to support, promote and improve local government, and raise national awareness of the work of councils. Our ultimate ambition is to support councils to deliver local solutions to national problems. 
• The Society for Innovation, Technology and Modernisation (Socitm) is a membership organisation of more than 2,500 digital leaders engaged in innovation and modernisation of public services. Established for more than 40 years, our network combines to provide a strong voice, challenge convention, and inspire change in achieving better place-based outcomes for people, businesses, and communities. 

Local government is a £121 billion sector, spending around £3.2 billion annually on technology and digital services and employing 1.4 million people. England’s 317 councils operate independently and are facing severe financial and workforce pressures, including a funding gap of more than £8 billion by 2028/29 and a 31.5 per cent reduction in staff over the past decade. These pressures are increasing demand for modern, reliable and sustainable digital infrastructure.
Councils sit at the centre of the UK’s public sector technology ecosystem. They hold data on every resident, exchange information with almost every branch of government, and rely on digital infrastructure to deliver essential services, support local businesses and meet rising expectations around resilience, accessibility and digital inclusion. They also have statutory responsibilities for planning, infrastructure coordination and community engagement, giving them a crucial role in determining where and how data centres are built.

Across LGA and Socitm networks, councils are raising growing concerns about the sustainability of data centres, particularly as demand is being driven by AI, especially generative AI. Officers report increasing political, media and public scrutiny of energy use, water consumption and emissions, alongside significant gaps in transparency from suppliers about the environmental impacts of AI technologies. In the LGA’s 2025 response to the AI Opportunities Action Plan, the LGA highlighted that national ambitions for AI cannot be separated from the infrastructure required to deliver them. We warned that policies such as AI Growth Zones risk accelerating data centre development without adequately considering cumulative local environmental impacts or ensuring that councils have the tools and data necessary to make informed decisions.

These concerns are reflected consistently across the sector. The LGA’s AI Network, now over 900 officers, regularly discusses the link between AI adoption and data centre sustainability. Councils report challenges responding to Freedom of Information (FOI) requests and public scrutiny relating to the environmental footprint of AI and difficulty obtaining reliable, consistent sustainability data from vendors. This lack of clear, verifiable, local information threatens public confidence in digital services and exposes councils to reputational risks.

The LGA’s broader programmes on digital connectivity, cloud adoption and responsible AI show the same pattern: AI-driven demand is shaping data centre growth, but councils lack the granular, place-based information needed to plan responsibly. 

To address this gap, the LGA undertook a discovery project on the environmental impacts of AI and data centre expansion. It found that inconsistent measurement, low transparency and rapidly evolving technologies make it difficult for councils to assess true environmental impacts. At the same time, the growth of data centre infrastructure is placing pressure on local electricity and water systems and contributing to rising public concern. This work, supported by a roundtable with councils leading on AI and data centre planning and ongoing input from the AI Sustainability Working Group, forms the basis of the LGAs response to this inquiry.
The LGA has also invited and incorporated input from similar public sector support networks such as Socitm who have also contributed into this LGA led response by drawing on insights from their core member of digital, data and technology leaders across local government.

• 1. Local government is the foundation of place-based digital and AI innovation: Councils are central to enabling connected places, from fibre rollout and 5G deployment to digital public services and local AI adoption. National digital growth ambitions rely on councils’ leadership to shape, plan, and coordinate the infrastructure that underpins digital transformation, while also building and maintaining trust with local communities.
• 2. AI-driven demand for data centres must be aligned with wider connectivity planning: Data centres cannot be planned in isolation; they draw on the same constrained systems, grid capacity, water infrastructure and land needed for full fibre, 5G connectivity, smart towns and connected public services in general. A holistic approach is essential to avoid conflicting pressures on local systems and to unlock digital growth. 
• 3. Councils need greater transparency from cloud and AI providers to make informed decisions and maintain public trust: Local authorities are the frontline of democracy and cannot currently plan adequately for sustainable connectivity or respond to rising public concern without clear, verifiable, site-specific data on energy use, water consumption and emissions. Current high-level reporting from large technology firms is inadequate and risks undermining FOI responses, procurement decisions and community engagement.
• 4. Rapid data centre expansion must not undermine local ambitions: Uncoordinated data centre growth could conflict with some local authorities’ climate goals, housing delivery and wider growth and development priorities. Councils need the evidence, capacity and policy levers to balance digital growth with environmental protection, resilience and community interests.
• 5. Government must work with local leaders to develop a joined-up, place-based strategy for AI and digital infrastructure: AI Growth Zones, connectivity programmes and national planning reforms must be co-designed with local government. Councils have the place leadership, local insight and statutory responsibilities required to ensure digital infrastructure supports sustainable economic growth, strengthens public services and delivers benefits for communities.
• 6. Investment in capacity on digital connectivity rollout is crucial: Councils are already balancing demands of digital infrastructure with competing local priorities such as housing delivery, environmental protection and regeneration. Many councils lack specialist digital infrastructure expertise, making it difficult to manage complex deployments and increasing the need for sustained capacity support.

1. What current and future factors and trends are driving demand for data centres and what opportunities and challenges do they pose for the UK?

1.1. From a local government perspective, demand for data centres is being driven by a combination of national economic priorities (including AI Growth Zones) rapid technological change, and wider national pressures. Central government has set ambitious objectives for digital transformation and the adoption of AI, increasing the emphasis on expanding the UK’s data centre capacity. These priorities shape the operating context for local government, often accelerating demand for land, energy, and enabling infrastructure, as well as placing pressure on local planning and place‑based decision making. At the same time, local authorities are themselves contributing to this demand as they expand their use of cloud services and AI‑enabled technologies to deliver public services.

1.2. AI Growth Zones represent a major opportunity for local government, with large‑scale data centres expected to attract significant private investment and create jobs. More than 200 councils applied to the competitive Growth Zones process, demonstrating the scale of local ambition . However, with only five zones designated, most councils will miss out, underscoring the need for a clear national approach to supporting data capacity and AI‑led growth beyond Growth Zone areas.

1.3. The most significant driver of new data centre demand for local government is the rapid scaling of AI and machine learning workloads, particularly generative AI. There are clear opportunities for AI adoption in local government, and a survey by the LGA found that 95 per cent of councils are already using AI, with councils seeing a range of benefits across service delivery provision . As the sector’s AI maturity continues to increase, the current trajectory points to a substantial and growing demand for data centre capacity to support these workloads.

1.4. The continued expansion of cloud‑based services is another significant driver of data centre demand. Local government spend on cloud hosting has increased rapidly, with sector expenditure almost tripling between 2016–17 and 2021–22. This trend is expected to continue through Local Government Reorganisation, which often triggers large‑scale infrastructure modernisation and cloud migration. For councils, this means an unavoidable and growing dependence on data‑centre capacity to deliver modern public services.

1.5. There are clear opportunities arising from this wider demand. Many councils are pursuing strategies for place‑based innovation, with regions such as Greater Manchester seeking to position themselves as data centre or digital infrastructure hubs . For local government, data centres can support broader economic development goals by creating high value jobs, attracting investment and stimulating growth in associated sectors such as cloud engineering, cybersecurity and advanced digital services. When aligned with local industrial strategies, this infrastructure can anchor wider innovation ecosystems and contribute meaningfully to regional growth.

1.6. However, these opportunities sit alongside substantial challenges. Local planning authorities often have to make decisions with a limited or inconsistent evidence base, market signals can be confusing, environmental impacts poorly harmonised across studies, and there is no single national approach to assessing long‑term data centre need. This makes it difficult for councils to distinguish genuine strategic demand from speculative proposals. The absence of coherent national guidance also creates uncertainty for councils seeking to balance economic benefits with environmental, energy and land use considerations at a local level.

1.7. Compounding this, local authorities operate within a complex and unbalanced governance landscape. As data centres have recently been designated as critical national infrastructure, a widening central–local tension has emerged. While central government articulates data‑centre expansion as a national strategic imperative, local government remains responsible for the planning, land‑use, environmental and community impacts. The recent intervention in Buckinghamshire , where local decision‑making was overridden, stands in sharp contrast to Edinburgh’s moratorium on new data centres due to environmental concerns . These examples reflect the wider tension between centrally set digital ambitions and the realities of local democratic accountability and place‑shaping.

1.8. Infrastructure pressures add further complexity. Data centres place significant and sometimes competing demands on electricity networks, water systems, digital connectivity and land, systems that local authorities must plan for, often without adequate early engagement from developers or national bodies. Councils must balance these pressures alongside commitments to housing delivery, industrial land, climate goals and environmental stewardship. Without a joined‑up national strategy, these trade‑offs become increasingly difficult to manage.

1.9. There are also important issues concerning the market structure underpinning data‑centre demand. Local government technology provision is heavily dominated by large US‑based technology firms, including AWS, Microsoft, and Google. The Competition and Markets Authority (CMA) estimates that AWS and Microsoft together account for around 90% of the UK cloud infrastructure market . While these providers have UK headquarters and operate data storage capacity within the UK, they do not guarantee that data is processed exclusively within the UK.

1.10. This raises important questions around data sovereignty and governance. In practice, UK public sector data may be processed under legal regimes outside the UK, most commonly within the EU, rather than solely under UK GDPR. While such arrangements are legally compliant under UK GDPR, councils remain responsible for ensuring compliance and ultimately bear the risk and accountability associated with any data breaches. As a result, many councils would welcome greater data sovereignty and transparency over where and how UK data is processed, particularly as reliance on cloud‑based services continues to grow.

1.10.1. Data sovereignty remains a complex and contested issue, particularly in the context of the rapid expansion of data centre capacity. A fundamental question is whose data this growing capacity is ultimately designed to serve. Much of the new data centre infrastructure in England and across the UK is privately financed and operated by large US‑based technology companies such as Google and Microsoft . As a result, even where data is physically hosted within the UK, questions remain about whether data can be considered truly sovereign when it is owned, controlled, or governed by overseas firms and subject to foreign legal jurisdictions. This raises important concerns about the extent to which increased domestic data centre capacity delivers meaningful data sovereignty for the UK, particularly for the public sector.

1.11. The main challenge is the time required to deliver the significant enabling developments needed for high-powered data centres. This extends well beyond the construction of the facilities themselves and critically depends on major investment in national infrastructure, particularly electricity transmission, grid capacity, and power generation (ideally from renewable sources). Estimates suggest that providing sufficient power to a suitable site can take between five and ten years, and this is only one component of the overall delivery timeline . At the same time, UK data centre capacity is already substantially outstripped by demand, meaning the UK is starting from a disadvantaged position compared to many of its European counterparts. So, although government is committed to significant data centre development, the full benefits of this commitment may not be felt for many years to come.

1.12. Finally, councils’ ability to respond to these opportunities and challenges is limited by a persistent lack of digital‑connectivity and technical‑infrastructure expertise. Many authorities do not have the specialist capability required to assess complex fibre, power and network requirements, engage with providers or plan proactively for future demand. Strengthening this capacity will be critical if the UK is to meet national ambitions while ensuring data‑centre development supports resilient, sustainable and locally accountable outcomes.

1.13. Together, these factors underline the need for a more coherent, coordinated national framework that aligns digital‑economy ambitions with local place‑shaping responsibilities. With clearer evidence, stronger local capacity and more balanced central–local engagement, data centre development can play a central role in supporting sustainable economic growth and resilient digital infrastructure across the UK.

2. What are the environmental impacts of different types of data centre currently operating in the UK and what are the future impacts likely to be?

2.1. Data centres underpin AI provision and digital services in local government, but their environmental impacts vary by facility type, workload intensity and cooling design. The key environmental impacts are concentrated in electricity demand, cooling-related energy use, cooling-related water use, and local environmental disruption (land take, construction impacts, noise/visual effects, and backup generation).

2.2. The LGA’s discovery work highlights that energy use is driven mainly by IT load, with cooling and “other” infrastructure forming a secondary but material share. Powering servers is typically the largest component (c. 45–70%), with cooling second (with wide variance across estimates), and other infrastructure comprising the remainder.

2.3. Many councils continue to operate legacy, on‑premise data centres that are inefficient and limited in scale, typically capable of supporting only low megawatt (MW) capacity. This level of provision is insufficient to meet the power, cooling, and performance requirements of modern AI and high‑performance computing workloads. As a result, the majority of councils already rely on alternative approaches to data storage and processing, including cloud‑based services. As demand for more data intensive services continues to grow, the long‑term viability of maintaining a distributed network of small‑scale local authority data centres is increasingly uncertain, with councils likely to face a choice between decommissioning these facilities or retrofitting them at significant cost.

2.3.1. As the development of high wattage data centres accelerates, councils will require clear national guidance, strategic support and appropriate funding mechanisms to manage the transition of their existing data centre estate, ensuring alignment with emerging digital and AI demands as well as national policy.

2.4. The increasing awareness and concern of the environmental impacts of digital infrastructure means that many councils would like to integrate sustainability requirements more effectively into procurement processes. However:

2.4.1. Suppliers often provide limited or generic corporate statements on environmental performance, rather than consistent, transparent, granular data on energy use, water consumption and emissions . This lack of meaningful information makes it difficult for councils to assess environmental impacts or make informed, evidence‑based decisions.

2.4.2. Often the provision of aspects such as cloud and AI is complex, environmental impacts are shared across tenants, making attribution difficult: councils procuring cloud services may be indirectly reliant on colocation capacity even when contracting with major vendors.

2.4.3. Like for like comparison between providers is currently very difficult. Many smaller AI providers rely on complex supply chains and do not operate their own data centres. Where smaller providers cannot access the same detailed data that larger providers can, sustainability procurement requirements could unfairly restrict them.

2.4.4. There is a strong case for greater standardisation of sustainability disclosure requirements across public sector technology procurement, enabling councils to use their collective purchasing power more effectively and avoid negotiating sustainability assurances in isolation. Without clearer expectations and shared frameworks, local authorities remain constrained in their ability to drive improved environmental performance through procurement.

2.5. Th LGA’s Sustainability of AI discovery identifies four interrelated developments that are likely to shape the future environmental impacts of data centres in the UK.

2.5.1. First, overall electricity demand is expected to continue rising as AI and cloud workloads scale, even where efficiency improvements are made.

2.5.2. Second, increasing rack densities are likely to drive greater use of liquid based cooling technologies in some contexts , heightening the importance of local water availability, monitoring and transparency.

2.5.3. Third, these trends are intensifying pressure on local planning systems and supporting infrastructure, particularly in electricity constrained areas and established datacentre clusters.

2.5.4. Finally, growing public and campaign scrutiny is increasing reputational sensitivity around data centre development, with councils often at the centre of these debates through their statutory planning role and wider place shaping responsibilities.

2.6. This underscores the importance of engaging the public meaningfully and at the earliest possible stage in the development of data centres. Early engagement helps build trust, surface local concerns, and improve decision making outcomes. Councils are well placed to lead this engagement, ensuring community voices are properly heard and that local issues and perspectives are effectively represented in national policy and infrastructure discussions.

3. What impact are data centres having on climate change and the Government’s Net Zero targets and how will this change in the short, medium and long term in the UK?

3.1. Many local authorities have set their own climate and emissions targets, often going beyond national commitments. There are significant climate ambitions across local government; 89% of local authorities in England have a climate change plan, and a third have specific carbon neutrality targets . However, in the immediate term, the current information landscape for data centres and AI makes it extremely difficult for councils to accurately quantify their contribution to overall emissions, in contrast to more established areas such as transport, housing and buildings. Over the medium to long term, this lack of robust, reliable data risks undermining councils’ ability to credibly track progress and, in turn, the legitimacy of local climate ambitions.

3.2. This challenge is exacerbated by limited transparency from large technology firms. Measuring Scope 2 and Scope 3 emissions associated with data centres and AI usage is particularly difficult, leaving councils with insufficient information to accurately account for the emissions impacts of digital infrastructure within their local areas. As a result, councils face structural barriers to comprehensive and consistent emissions reporting, despite being held accountable for meeting ambitious local climate targets.

3.3. Government should introduce robust transparency requirements for technology firms supplying data centre and AI services to the public sector. This should include standardised, auditable disclosure of emissions, energy sources and key efficiency metrics associated with the development, training and operation of AI models. Such requirements would support councils to accurately account for the emissions impacts of digital infrastructure and make informed procurement and planning decisions that are consistent with their local net zero commitments.

4. To what extent will Artificial Intelligence (AI) accelerate the need for data centres and is this being adequately taken account of by the Government and relevant bodies, such as the Climate Change Committee and the Office for Environmental Protection, in terms of nature, the environment and climate change?

4.1. AI use is accelerating in local government. As already stated, 95 per cent of councils are already using AI in some form , and the maturity of these tools will increase significantly over the coming years. This growth in generative AI, automation and data-driven public services will substantially increase local government demand for compute power, cloud hosting and secure data storage. AI is therefore a major driver of new data centre capacity requirements, both for councils and for the wider public sector ecosystem they sit within.

4.2. Demand for data centre capacity is not solely a function of technology adoption. It is also shaped by architectural decisions, data governance practices, model lifecycle management and the extent to which systems are designed for reuse, interoperability and efficiency. Treating data centre expansion purely as a supply side challenge risks overlooking opportunities to moderate growth pressures through better digital design and governance.

4.3. For instance, environmental and infrastructure implications of this AI-driven demand are not being adequately accounted for in current national planning, regulatory or environmental oversight frameworks. At the same time, councils are facing rising levels of public concern about the environmental impact of associated data centres. These concerns are exacerbated by a lack of information that local authorities can provide to officers and residents about the environmental impacts of AI, including under FOI requests. Limited transparency about the environmental impacts of data centres, underpinned by current reporting requirements, is a key blocker to being able to understand and communicate the environmental impact of AI. Even where new data centres in the local area are not directly powering the AI that local authorities use, they can exacerbate existing concerns about the environmental impacts of AI at the local level. These concerns may also stall the development of data centres and the progress of AI Growth Zones.

4.4. These concerns can directly affect the planning pipeline. Even when data centres are not directly linked to the AI systems used by councils, they contribute to wider environmental anxieties around AI and digital infrastructure. Notably, Edinburgh Council has voted to consider a moratorium on data centre development, which would be in place until guidance is developed that provides a definition of a ‘green’ data centre . The specific language of a ‘green’ data centre is specific to the Scottish NPF4 and is not present in the current English NPPF, but Edinburgh’s decision demonstrates the importance of engaging local authorities as key stakeholders in the planning process and ensuring that adequate information is available to support informed decision-making.

4.5. This underscores the need for greater transparency from large technology firms and more robust scrutiny of environmental claims. High level or aggregated sustainability data is insufficient; councils require verifiable, place specific information on energy use, water consumption, waste heat, land impact and emissions to weigh development proposals against local climate strategies and community interests. Without this, local planning authorities struggle to reconcile national digital ambitions with environmental duties and public accountability.

4.6. These challenges must also be understood in the broader context of the UK’s digital connectivity and infrastructure landscape. As the LGA has made clear in its response to the AI Opportunities Action Plan in 2025, AI infrastructure cannot be treated in isolation. It must be considered alongside full-fibre deployment, 5G investment, spectrum availability, backhaul capacity, and wider digital infrastructure planning. Local authorities are essential partners in delivering these national ambitions. For councils to fulfil this role, they require the skills, capacity and resources to engage strategically with developers, undertake robust environmental assessment, and integrate digital infrastructure into local economic growth plans. Without this support, local government risks being asked to deliver national ambitions without the tools to do so effectively.

4.7. A reset in the central–local relationship is therefore needed. Collaboration between central government, Ofcom, combined authorities, local authorities and industry must be strengthened to ensure AI infrastructure rollout is efficient, equitable and responsive to local needs. Local leaders must be able to engage early in planning processes, represent community concerns, and ensure benefits are understood. The recent changes to paragraphs 86 and 87 of the NPPF, giving greater weight to data centre applications as part of the “modern economy,” are welcome, but they must be accompanied by improved guidance, shared learning, appropriate support and co design with the sector if they are to be effective.

4.8. There are also important concerns about how national consenting regimes interact with AI driven infrastructure growth. The LGA has repeatedly emphasised that the Nationally Significant Infrastructure Projects (NSIP) regime should be used only for genuinely nationally important schemes. When data centre projects bypass local scrutiny, community engagement and local democratic accountability is weakened and the planning system becomes slower, not faster. Evidence from other infrastructure sectors shows the NSIP regime is already experiencing long delays and high rates of judicial review, expanding its use risks further undermining timely and effective decision making.

4.9. Councils play a central role as place leaders, balancing economic growth with environmental protection and community interests. National approaches to data centre expansion must therefore reinforce, rather than override, local decision making and ensure that sustainability, transparency and public trust remain central throughout.

4.10. Classifying data centres as critical national infrastructure strengthens security and resilience but does not remove the need for holistic sustainability assessment. Alongside power usage, water scarcity, highlighted by international experience, including Ireland, must be a core consideration in siting decisions. Regional mapping of water, power and land constraints should inform national AI infrastructure planning to ensure environmental limits are respected.

4.11. Overall, AI is accelerating the need for data centres at pace, but current governance, transparency and planning systems are not keeping up. Stronger environmental standards, better oversight from national bodies, a more balanced central–local partnership, and clearer transparency obligations on technology providers will be essential to ensuring AI driven infrastructure growth is sustainable, locally accountable and aligned with net zero objectives.

5. Planning Policy

5.1. To what extent do existing policies, such as the Environmental Improvement Plan and the Planning and Infrastructure Act and associated policies, take account of the potential impact of data centres, particularly in terms of water use, nature and the environment?

5.1.1. Existing policy frameworks only partially address the impacts of data centres on water use, nature and the environment, and largely do so indirectly. While planning, environmental and infrastructure policies provide mechanisms to assess environmental effects, they were not designed with the scale, intensity and cumulative impacts of data centres in mind.

5.1.2. Constraints in water supply, wastewater capacity and grid infrastructure are already impeding development, and environmental impacts are often addressed late in the process rather than through strategic, plan‑led consideration. As a result, current policy does not yet sufficiently reflect the growing environmental footprint of data centres or the pressures they place on local ecosystems and utilities. Proposed spatial development strategies to align infrastructure and new housing and commercial developments may enable more strategic, plan-led consideration.

5.1.3. The LGA has consistently highlighted that constraints in grid capacity and water infrastructure present a major barrier to new development, alongside a failure by relevant agencies to ensure water companies fulfil their statutory duties to provide adequate wastewater capacity for growth. This has led to delays, objections and additional costs on allocated sites. As data centre development accelerates, these issues will become more acute unless proactively addressed.

5.1.4. It is therefore essential that the environmental impacts of data centres, particularly their demands on water and energy infrastructure, are robustly assessed and effectively enforced through the planning and regulatory system.

5.1.5. As the LGA has said in its NPPF response , more local plan-making and entirely new strategic plan-making will require significant resources for councils to deliver effectively.

5.2. How should the impact of data centres be factored into future policies, such as the Land Use Framework, regional planning, housebuilding and reform of the water sector?

5.2.1. Future policy frameworks should explicitly incorporate data centres into strategic approaches to land use, infrastructure, housebuilding and water management. This includes aligning national frameworks such as the Land Use Framework and water sector reform with regional and local spatial strategies, so that high demand uses are planned for alongside housing and economic growth.

5.2.2. Policies should ensure that water availability, wastewater treatment capacity, energy infrastructure and environmental limits are assessed upfront and reflected in development plans, rather than mitigated on an individual site basis. Stronger alignment between planning authorities, water companies and grid operators will be essential to ensure infrastructure investment supports sustainable growth.

5.3. How important is the location of data centres and what factors should be considered for optimum siting of them? 5.3.1. The location of data centres is critical to managing their environmental and infrastructure impacts. Optimal siting should be guided by access to sustainable water supplies, sufficient wastewater and grid capacity, and a clear understanding of cumulative environmental effects at a regional scale. Particular care is needed to avoid development in environmentally sensitive areas or the loss of high-quality agricultural land. Decisions on siting should remain plan-led and subject to local democratic oversight, ensuring that the benefits of digital infrastructure are balanced against long-term impacts on communities, land use and the natural environment.

6. Has the Climate Change Committee adequately taken account of the impact of data centres, especially in its advice on the Seventh Carbon Budget?

6.1. The Seventh Carbon Budget rightly acknowledged the vital role of local government in addressing climate change, supporting the delivery of critical infrastructure upgrades, and ensuring that benefits are shared across local communities. Building on this recognition, any future work examining the environmental impact of data centres should reflect the importance of local government as key partners in the planning, development, and oversight of this infrastructure. It should also ensure that local climate action can properly account for data centre expansion, to support the delivery of local climate plans.

7. Emerging Technologies to minimise environmental concerns

7.1. What existing and emerging technologies can be used to minimise the environmental and climate change impact of data centres?

7.1.1. Data centres generate significant volumes of waste heat as a by‑product of cooling, which is continuous and highly predictable. This surplus heat presents substantial opportunities for reuse to supply homes and commercial buildings in the surrounding area. Advances such as liquid cooling and adiabatic cooling enable heat to be captured at higher temperatures, making it more suitable and efficient for integration into heat networks.

7.1.1.1. This presents a significant opportunity for government to advance its heat network ambitions by enabling data centres to act as sustainable, central sources of low‑carbon heat. Supplying heat at a network scale, rather than relying on individual building‑level systems, can deliver efficiency gains, lower emissions, and tangible social and economic benefits for local communities.

7.1.2. The mainstream adoption of renewable energy sources, including wind, solar and geothermal, is central to reducing the carbon footprint of data centres. Although costly, many sites are utilising Corporate Power Purchase Agreements (CPPAs) to secure significant long-term investment in renewables.

7.1.2. The integration of battery energy storage systems (BESS) is also becoming essential, enabling greater use of intermittent renewables, improving grid flexibility, and reducing reliance on fossil‑fuelled back‑up generation during periods of peak demand or grid constraint.

7.1.3. Modular and prefabricated builds can lower embodied carbon by reducing material waste and improving construction efficiency, while low‑carbon material choices (e.g., recycled content, lower‑carbon concrete/steel) further reduce upfront emissions. Where feasible, retrofitting or repurposing existing facilities can avoid a significant share of embodied emissions compared with new build development.

7.2. How mature are these technologies and are they ready to be rolled out at the scale and pace required to match the potential expansion of data centres?

7.2.1. In many cases, existing data centre facilities were not designed to accommodate newer low‑carbon and climate mitigation technologies, such as high‑density computing, liquid cooling, or heat recovery systems. As a result, incorporating these technologies frequently requires complex and costly retrofitting, or in some cases full redevelopment, due to constraints in legacy power, cooling, structural, and water infrastructure.

7.2.2. The potential to reuse waste heat from data centres is also heavily influenced by location. In many instances, data centres are sited remote from residential or commercial heat demand, limiting the feasibility and economic viability of heat reuse.

7.2.3. While the deployment of renewable energy in England has accelerated, particularly through significant investment in offshore wind, the scale and pace of current deployment remain insufficient to offset the rapidly growing electricity demand and associated carbon footprint of AI use and data centre expansion. This challenge is particularly acute given the UK’s stated ambition to deliver a fully decarbonised electricity system by 2035, which will require a substantial increase in clean generation capacity alongside measures to manage rising demand.

7.2.4. See examples listed below (8.) for projects that incorporate innovative sustainable methods.

7.3. What specific role can renewable energy play in reducing the carbon footprint of data centres?

7.3.1. Utilising renewable energy to power data centres does not eliminate local grid impact and is only one component of reducing the overall climate impact. Data centres continue to draw large, concentrated, and continuous loads from the grid, contributing to congestion, reinforcement costs, and local capacity constraints regardless of the contractual source of power. However, renewable energy remains essential for managing Scope 2 emissions under established carbon accounting standards.

8. What opportunities do data centres offer in helping to power and heat local communities and amenities and what will be required to deliver benefits?

8.1. Councils are already at the forefront of promoting more sustainable approaches to data centre development, using planning, design, and place-based decision-making to minimise environmental impacts and disruption to local communities. In many cases, councils work in partnership with developers and other organisations that are able to align with and support ambitious local net zero targets, ensuring that data centre developments reflect the specific environmental, social, and climate priorities of their area. Government should strengthen this approach by explicitly supporting and empowering councils to place sustainability objectives at the centre of data centre planning and delivery, including through clear national policy, thus ensuring developments are aligned with local priorities and deliver minimal disruption to communities and the environment.

8.2. Blackpool Council’s Silicon Sands project demonstrates how local government can proactively shape sustainable digital infrastructure in line with climate ambitions . Rather than treating data centres as purely commercial developments, the council has embedded sustainability requirements from the outset, including a commitment to renewable-led power supply, the use of liquid immersion cooling to significantly reduce operational energy demand, and the reuse of waste heat to support nearby buildings and potential district heating networks. The facility’s use of immersion cooling by submerging servers in non-conductive liquid is expected to reduce cooling-related energy consumption by up to 50% compared to traditional air-cooled systems, while enabling higher computing density and eliminating the need for energy-intensive chillers and fans. This “use energy twice” approach transforms waste heat from a liability into a community asset, with plans to warm the Sandcastle Water Park and social housing developments. The site’s proximity to Blackpool and The Fylde College and the planned Multiversity campus also supports a pipeline of local talent in AI, energy systems, and digital infrastructure. By positioning sustainability, energy efficiency and heat reuse as core design principles, Blackpool has created a place-based model that aligns digital growth with local net zero objectives, while retaining public sector oversight of environmental outcomes. This approach provides a replicable example of how councils can use planning, convening power and strategic investment to ensure that data centre and AI infrastructure supports, rather than undermines, local climate commitments.

8.3. Similarly, KAO Data is working closely with Stockport Council and the Greater Manchester Combined Authority (GMCA) to ensure that data centre development in the region does not undermine local net zero targets. The facility, which is expected to begin operations in 2027, will be powered by 100% certified renewable electricity and will use sustainable hydrotreated vegetable oil (HVO) fuel for backup generators, reducing net CO₂ emissions by up to 90%. In addition, the planned deployment of an advanced cooling system is expected to further improve energy efficiency and reduce the overall environmental impact of the data centre.

8.4. The London Borough of Ealing has undertaken a Heat Network Feasibility Study to identify and assess opportunities for the development of low‑carbon heat networks. The study found that Ealing Town Centre is a heat‑dense area with existing supporting infrastructure and planned data centre development, making it a viable and attractive location for a heat network. The Council is now considering next steps, working with a range of stakeholders to explore whether the project can be progressed and delivered in the coming years.

9. Are there beneficial or precautionary lessons to learn from the impact of data centres outside the UK?

9.1. There is growing international evidence of both the potential and realised negative impacts of data centre expansion. Councils in England will want to learn from earlier developments overseas to ensure future approaches prioritise sustainability, protect the local environment, and reflect community needs. Local government must be actively supported by central government to minimise impacts on local communities and to ensure that data centre expansion and the development of AI Growth Zones are well managed. This requires councils to be treated as key stakeholders, with local government voices genuinely considered in the planning and delivery of future developments.

9.2. US research highlights the significant environmental and infrastructure impacts associated with hyperscale data centres. A growing body of evidence shows that facilities are frequently developed in water‑scarce areas, placing strain on local water supplies and electricity grids, with documented cases of water quality degradation and pollution affecting surrounding communities.

8.3. Similarly, evidence from Ireland shows the scale of data centre impacts closer to home. It has been reported that data centres account for over 50 per cent of metered electricity demand in the Dublin region . This, in turn, is contributing to increased pressure on the electricity system, rising household energy costs, and significant additional demand for water to cool these facilities.

9.3. Key lessons must be applied to ensure that England and the wider UK adopt as sustainable an approach as possible to the scaling of data centres. This includes using growth in digital infrastructure as an opportunity to stimulate investment in renewable energy, for example through Corporate Power Purchase Agreements (CPPAs). CPPAs can help reduce Scope 2 emissions, provide long‑term electricity price certainty, and support the expansion of the UK’s renewable energy capacity.

10. To what extent will the resource demands of data centres impact on other sectors with regard to competition for resources and decarbonisation

10.1. Regen and National Grid DSO’s Data Centre Impact Study states that “an already-constrained grid capacity will struggle to accommodate new large demands while also maintaining housing targets”, citing cases already seen in West London . Local authorities are at the front line of competing demand for grid connections. As data centres take up new grid connections, particularly in AIGZs where they will be prioritised , local government should be supported to manage impacts on local housing delivery.