Chancellor unveils so-called Data Centre Covenant which draws up series of pledges developers are ‘encourgaed’ to meet

The government said it is ushering in a so-called Data Centre Covenant which it said “will unlock the infrastructure Britain needs to lead on AI while ensuring communities share in the benefits”.

In a briefing note, the government said: “All data centres are encouraged to meet the tests set out in the covenant, with strategic data centres required to meet them where they are seeking enhanced government support.”

Under the covenant, data centre firms will have to “pay for their fair share of energy – covering any energy costs they create – so households, communities and other businesses do not pick up the bill”.

data centre

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A data centre being built in Slough. The chancellor said today it wants to speed up their construction but has asked their developers for ‘responsible development that delivers lasting benefits for communities’ in return

It added: “Communities that host nationally important infrastructure should share directly in the rewards. Strategic data centres should agree a Local Benefit Plan that commits to substantial investment, developed with the local community and linked to the development’s size. This can be spent on local priorities, like transport, parks and town centres.”

It also said data centres should “adhere to the highest environmental standards: protect nature, minimise water use and publish annual energy and water consumption reports. They should also capture the heat they produce for nearby homes, schools, hospitals or businesses wherever practical.”

And it said that data centre providers should “create jobs and invest in paid apprenticeships and training places, supporting young people into the AI, digital and infrastructure jobs of the future”.

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In return, the chancellor John Healey said it would “reserve and reallocate” connections, accelerate connections before 2030 and enable access to temporary power to bridge the gap to grid connections.

The government added it will “set out further details in due course on the definition of strategic data centres and the additional criteria such projects will be expected to meet” while adding it is “moving forward with wider reforms to support viable data centre projects to build faster and with more certainty”.

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