Written evidence submitted by Ark Data Centres [FPS 063]

 

This response to the Housing Communities and Local Government Committee inquiry on the future of the planning system in England is made by Ark Data Centres (or Ark) and has been prepared with input from Savills Planning and Connect.

About Ark Data Centres

Established in 2005, Ark develops and operates secure and efficient purpose-built data centres, operating UK campuses at Spring Park in Corsham, Cody Park in Farnborough and Meridian Park in Enfield. Ark’s data centres are wholesale facilities which allow multiple companies or organisations to locate their data functions in one secure environment. Ark’s clients include major telecommunications providers, businesses operating in highly regulated markets such as the finance industry and educational institutions and public sector.

Ark’s joint venture with the Cabinet Office; Crown Hosting Data Centres has ensured that the public’s experience of IT has been enhanced, has reduced risk for Government and is designed to allow the public sector to access services at a fraction of the cost of their competitors and to drive down their own carbon footprint.

Ark has an ambitious plan for further growth in the UK. It secured a resolution to grant planning permission (subject to GLA Stage 2 Referral and the signing of a Section 106 Agreement) by London Borough of Hillingdon Council for a new data centre campus at Union Park, Hayes, in October 2020. Union Park alone will support the creation of over 300 jobs and represents an initial investment of £500 million, raising to £800 million when it is fully fitted. It has also acquired a further sites in Park Royal, West London, and Chertsey, Surrey.

Ark is pioneering new approaches to environmentally sustainable data centres and has procured 100% Renewable Energy Guarantees Origin (REGO) backed renewable energy since 2013. By offering the most advanced access to data storage and processing, Ark offer the infrastructure necessary to achieve significant cost and environmental benefits for its clients. This is facilitating the rationalisation of data centre provision, where clients can ‘buy in’ to centres at the forefront of environmental sustainability rather than running their own older centres.

More information about Ark’s operations and existing facilities can be viewed at www.arkdatacentres.co.uk

 

The need for new Data Centres and how we need to plan for them

Data centres are the factories of the future that store data and are pretty much at the core of everything we do if it involves using a smartphone, computer, tablet or any other electronic device.

Most of us are data centre users even if we don’t know about it. If you are listening to your favourite Spotify playlist during your commute, scrolling photos of cats on Instagram or you pay for your coffee using your contactless card – then you are making use of a data centre.

Data centres require development in accessible locations, which are away from the central city core whilst being able to access significant levels of power supply. Suitable sites for the development of new data centres which can offer access to the very high levels of power required are in short supply.

Local authorities have a limited understanding of the modern requirements of the data centre sector. This includes a continued discrepancy about which Use Class a data centre falls within (B8 or Sui Generis) and a lack of knowledge of the locational requirements and operational characteristics of a data centres.

Ark, the sector (including TechUK) and end users need to help communicate the needs and the benefits of the sector to local authorities, however, recognition from Government in future planning reforms would support the industry to be able to deliver the critical digital infrastructure required for a modern sustainable economy.

Are the Government’s proposals the right approach?

It is clear from the outset of the White Paper that its emphasis is on improving the delivery of housing. The White Paper is very light on any aspiration to deliver employment land, and thus economic growth, through a reformed planning system. That is not to say that it won’t – but increasing housing delivery is the key focus and impetus for the changes proposed.

Ark believe that there is a missed opportunity in the White Paper to set out how, in connection with housing growth, planning reform can also unlock growth of all development needs, and specifically the digital infrastructure for a modern, sustainable economy.

The White Paper fails to make any significant mention on how the planning system needs to be reformed not just to boost housing supply, but also to deliver economic growth and employment land. It broadly states, on page 32, that Local Plans will need to identify areas to meet a range of development needs – such as homes, businesses and community facilities – for a minimum period of 10 years, including ‘land needed to take advantage of local opportunities for economic growth’. However, in the context of the wider document, it would appear that these references relate to providing spaces for start-ups and spin out companies looking to set up near to research-intensive universities.

There is clearly a disconnect between the Government’s Industrial Strategy ‘Building a Britain Fit for the Future’ and the Planning White Paper which recognises how the world is becoming increasingly digitalized, and digital connectivity has rapidly become an essential requirement for the way people live and do business.

The UK is in a very strong position to build on its world-leading digital economy. However, for it to do so it is essential that it is supported by the correct infrastructure and services to take full of advantage of its potential.

Digital infrastructure facilitates the flow of data and comprises data infrastructure (data centres) and multiple interlocking telecoms networks (communications), which provide connectivity. Economic growth depends on modern infrastructure, both digital and physical, but digital infrastructure is a far more powerful driver of growth than physical infrastructure.

Given the importance of data centres, it is felt that the sector, and the wider digital economy, deserves far greater recognition in the White Paper. They have specific locational requirements which need to be considered in the reform of the planning system. How the planning system can be improved to ensure the delivery of employment land for a range of economic uses, which include but will not be exclusive to data centres, therefore should be better deliberated in the White Paper.

Our position on how this should and could be achieved is expanded on below.

Local plan-making

Notwithstanding the above, there are generally, some encouraging signs and proposals, in principle, to improve the planning system and its efficiency, notably the plan making process. However, we make three points in response to the content of the White Paper in respect to local plan making.

1) Employment Land Availability and Allocations

The purpose and outcomes of local employment land assessments so that local plans meaningfully address the specific locational requirements of different sectors needs to be revisited. The NPPF at paragraph 82 already expects this, yet it is very rare that Local Planning Authorities will engage with the data centre industry to inform local plan assessments and wider plan making process. It is also the case that local authorities lack the awareness and knowledge about the sector’s land use requirements which means that local plans will often fail to make provision for digital infrastructure and to ensure that there are opportunities for data centre developments in suitable locations for such a use.

The need for employment allocations to be based on an up to date (and forward thinking) evidence base is critical – and that this should ensure that the need for new, large scale allocations may be necessary to ensure that all types of requirements (locational and size) are addressed in local plans, to avoid there being an over-reliance on small sites which are unlikely to accommodate the sector’s needs.

2) Growth Areas & Design Codes

The three new categories of land designation proposed in the White Paper are noted, and we have the following observations in this respect:

3)              Transition to new Local Plans

There is a concern about the time and effort required for the new Local Plans to become embedded, utilising new skill sets and the uncertainty about how long and how a transitional period will work for. The proposals in the White Paper to reduce the plan period to a minimum of 10 years, with a 5 year review mechanism is also questionable. Plan periods need to be longer to give developers certainty about strategic development, such as data centre development

Use Classes and B8 typologies of use

As noted above, there is ambiguity about the Use Class of a data centre, but there is a wider need to better define different typologies of industrial, logistics and data centre developments, so that the Use Class is cognisant of modern B Class Uses which would not have been anticipated when the Use Class Order was last updated in respect of B2 and B8 uses. Clearly a data centre use should fall within the same B Class as other industrial and logistics uses given its characteristics and the suitability of locating data centres on industrial land, but it would be useful for there to be confirmation from Government of its B8 use (as opposed to Sui Generis, which some LPA’s define them as).

CIL

The Government is proposing a major shift in its approach to developer contributions indicating that most financial contributions will be secured by a national Infrastructure Levy, with rates decided by the Government. However, whilst there is little detail in the White Paper, it is being described as an extended levy because CIL would be retained for use by the regional Mayors for strategic projects. The Government’s intention is to capture more uplift in land value while mitigating development and removing the potential for developer contributions to be negotiated down.

The transparency and certainty that the proposals could offer is useful, but we have concerns about how the rate would be calculated for data centre development. The rate would be charged on the final value of a development and there would be a minimum threshold value, taking into account build costs and land costs, under which the Infrastructure Levy would not be payable. There is are important implications of between the type of valuation used (i.e. residual land value vs the gross development value, or GDV) which needs to be considered and clarified in the revised proposals. For data centre development this is particularly relevant because of the significant capital (and risk) required to be invested in the build and function of a data centre (and thus reflected in the GDV).

The Government therefore needs to be alerted to the possible unintended consequences of the changes to the CIL Regime on the viability of data centre development. For data centres, which require high construction costs but also result in high investment values, this means the value of the uplift is disproportionate and potentially could trigger unintended consequences to the viability of such development. As such, it is critical that the data centre sector is fully engaged in the development of any new Infrastructure Levy regime and that a one-size fits all approach for residential development is not applied to data centres and other types of economic development.

 

Summary

There is a clear message to make that the data centre sector need to be seen as more than the provision of local jobs (and a preoccupation of how many), but as nationally important digital infrastructure that is absolutely essential to facilitate societal changes we face and to support the UK in becoming a world leader in the sector.

 

In seeking to build 300,000 homes a year, is the greatest obstacle the planning system or the subsequent build-out of properties with permission?

Ark do not wish to make any representations concerning this.

How can the planning system ensure that buildings are beautiful and fit for purpose?

Please refer to our comments regarding design codes above, otherwise we do not wish to make any representations concerning this.

What approach should be used to determine the housing need and requirement of a local authority?

Ark do not wish to make any representations concerning this.

What is the best approach to ensure public engagement in the planning system? What role should modern technology and data play in this?

Ark do not wish to make any representations concerning this.

How can the planning system ensure adequate and reasonable protection for areas and buildings of environmental, historical, and architectural importance?

Ark do not wish to make any representations concerning this.

What changes, if any, are needed to the green belt?

Land around densely built up urban areas is extremely scarce. The Green Belt performs an important function and its effectiveness in protecting the countryside and preventing urban sprawl is widely acknowledged. However, there are many areas of land on the edges of towns and cities which have been within the Green Belt for many decades, which no longer perform a useful Green Belt function. This is often because circumstances may have changed and – for example - what was once an important piece of open land may now be surrounded by roads or other infrastructure. We believe it is critical to encourage Local Councils to review their Green Belt boundaries on a regular basis with the express aim of identifying any areas of land which could safely be released for development, without harming the function of the wider Green Belt.

This could yield new land for development which may be suitable for data centre or logistics development, of a size and scale which is not possible to find within existing built up areas, and where it would perform important economic functions by serving the needs of the built up area including providing employment.

 

What progress has been made since the Committee’s 2018 report on capturing land value and how might the proposals improve outcomes? What further steps might also be needed?

Ark do not wish to make any representations concerning this.

 

October 2020