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Plans for a contentious £1bn data centre near London have encountered a legal setback after the UK government admitted it made a mistake in granting planning permission.
Ministers had given approval last year for the “hyperscale” facility to be constructed on a former landfill site in Iver, Buckinghamshire, as part of the UK’s data centre boom.
But in correspondence disclosed as part of a legal challenge against the project brought by campaign groups Foxglove and Global Action Plan, the government acknowledged that a legal error had been made and that the permission should be quashed.
Data centres are a central part of the UK’s economic growth strategy and the government has previously stepped in to over-rule local authority objections to facilities built on greenbelt land.
The sites also need substantial water and electricity resources, raising concerns over their sustainability.
Campaigners against the Iver development brought a High Court challenge, warning that officials had failed to properly consider its energy use and environmental impact.
Before granting permission, officials decided that the data centre did not require an environmental impact assessment. This was because the developer had proposed “mitigation measures”, such as using low carbon energy.
However, in a letter this week to parties in the case, the government acknowledged that it had made “a serious logical error” and/or had given an “inadequate” rationale for considering that the development did not require the assessment.
Despite the reversal, lawyers for developer Greystoke told the High Court in written arguments that the government’s initial decision was “made on an entirely proper and lawful basis”.
At a hearing in London on Thursday, a judge allowed the legal challenge against the project to proceed, and the case is due to be heard at a later date.
Since 2024, local authorities have been required to consider the need for data centres when setting local policies and deciding planning applications. Data centres are also able to opt into the nationally significant infrastructure projects regime, allowing them to secure planning consent more quickly.
Most UK data centres are concentrated in Greater London, which is Europe’s largest data centre market, according to a House of Commons report last year. Hubs are also emerging in locations such as Manchester, north-east England and south Wales.
The government has estimated that about £45bn of private-sector investment has gone into the sector since July 2024.
Large technology companies, including Amazon, Microsoft and Google, are among the biggest builders and users of data centres in the UK, with Google building its first UK data centre at Waltham Cross, Hertfordshire.
Alistair Watson, planning partner at law firm Taylor Wessing, said given the “government’s support of data centres, it was likely to look at the case again and is likely to grant planning permission”.
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