The UK government has yet to decide which department will run its AI Growth Zone program, DCD can reveal, leaving the flagship scheme for the data center industry in limbo.
AI Growth Zones were launched in January 2025 and were hailed as a way to encourage data center developments and attract billions of pounds of new investment to the UK. AIGZs had been overseen by the Department for Science, Innovation, and Technology (DSIT), but this was abolished last Monday when new Prime Minister Andy Burnham took office.
But while many of DSIT’s functions have been reassigned to the Department for Business and Trade, now renamed the Department for Business, Innovation, Science and Trade, and the Department for Culture, Media, and Sport, ministers have yet to decide which team will run the AIGZs.
Officials told DCD the government remains committed to the delivery of AI Growth Zones, and confirmation on which department they will fall under will follow “in due course”. The government declined to answer DCD’s question on whether any changes would be made to the program as a result of the Whitehall reorganization, and whether the team previously charged with delivering the growth zones will remain in place.
AI Growth Zones are areas where data center developments are encouraged through financial incentives and priority access to power. It is hoped they will help meet a government target of adding 6GW of new AI-ready data center capacity in the UK by 2030.
So far, five growth zones have been created, two in Wales, one in Oxfordshire, one based around Cobalt Park near Newcastle, and one in North Lanarkshire, Scotland.
At the time they were launched, former Prime Minister Keir Starmer said they would help “unleash the potential” of AI in the UK, though whether successor Burnham shares this enthusiasm for the scheme is unclear. Industry figures, meanwhile, have questioned whether AIGZs are effective, especially as they appear to do little to tackle the underlying issues around power availability in the UK. Energy costs in Britain are higher than in the US and other European countries, while getting a new grid connection takes an average of eight years.
The uncertainty around AIGZs comes as MPs on the Data Centres All-Party Parliamentary Group (APPG) launched an inquiry into ways the nation can grow its data center sector.
Entitled “Unlocking the UK’s Data Centre Growth Opportunity,” the inquiry will “assess whether the UK’s current policy and regulatory environment is sufficient to support future place-based growth in the sector,” and what changes may be needed to strengthen the UK’s international competitiveness in digital infrastructure.
It is seeking contributions from those connected to the industry around three topic areas: Energy infrastructure and international competitiveness, investment, planning and regional growth, and innovation and sustainability.
Chris Curtis MP, chair of the Data Centres APPG, said: “Data centers are fast becoming some of the most significant infrastructure investments in the country, and with the right approach, they can deliver good growth, good jobs, good skills and lasting economic and social benefit in the communities that host them.
“This inquiry is about making sure that as the sector expands, it does so in a way that spreads opportunity across every region of the UK, not just where investment already concentrates. I’d encourage anyone with a stake in this agenda to submit evidence and help us build the case for growth that works for everyone.”
The APPG, a cross-party group, was launched in January. Written submissions to the inquiry can be made by emailing [email protected]. The deadline for contributions is Friday, September 25.
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