Announced in the Budget, I welcome the Government’s new Data Centre Covenant, which sets out clear expectations for how data centres should contribute to our economy, protect the environment and benefit the communities that host them.
Data centres are an increasingly important part of our digital infrastructure. However, it is only right that developments of this scale meet clear standards and contribute to the UK’s economic interests, rather than leaving local communities to bear the costs without sharing in the benefits.
Kao data centre is being built in Reddish, and I know that local residents have concerns about the impact it could have on their community. I share those concerns, and I believe residents deserve clear answers about how this development will affect their area and what they can expect in return.
That is why I welcome the Covenant’s focus on setting clear expectations for energy costs, community benefits, environmental standards, employment opportunities and national security. While all data centres are encouraged to meet these tests, developments designated as strategically important will be required to meet them when seeking enhanced Government support.
Crucially, the Covenant recognises that communities hosting nationally important infrastructure should share directly in the rewards. It sets out an expectation that strategic data centres agree Local Benefit Plans, developed with the local community, committing to substantial investment proportionate to the size of the development. This investment could support local priorities such as transport, parks and town centres. For Reddish, it is important that the needs and priorities of local people are properly considered.
The Covenant also sets out important expectations around environmental responsibility. Data centres should protect nature, minimise water use and publish annual reports on their energy and water consumption. Where practical, they should capture and reuse the heat they generate to benefit nearby homes, schools, hospitals and businesses. These measures matter because major developments must take account of their wider environmental impact, as well as the needs of the communities around them.
In addition, I welcome the emphasis on creating good-quality jobs, paid apprenticeships and training opportunities. Data centre development should help people, particularly young people, access the skills and employment opportunities created by the growth of artificial intelligence and digital technology.
Energy costs are another important consideration. The Government’s expectation is that data centres should pay their fair share of the energy costs they create, rather than passing those costs on to households, communities and other businesses. They should support a more resilient energy system and the transition to clean power.
I recognise the importance of developing the infrastructure needed to support new technologies and economic growth. But local people should be able to see that their interests are being taken seriously, that environmental impacts are being properly addressed and that opportunities for jobs, training and community investment are being prioritised.
I will therefore be seeking clarity on how the expectations set out in the new Data Centre Covenant will apply to the Kao development in Reddish. The Government has said that further details will follow on the definition of strategic data centres and the additional criteria they will be expected to meet, including their contributions to local communities. I will be looking closely at what this means in practice for developments in Stockport.
Residents deserve transparency about the impact of the Kao development and a clear understanding of the benefits it will bring to our community. I will continue to press for the interests of Reddish to be properly considered as these new standards are put into practice.