Reports on 22 July indicated that UK data centre policy faces a reset under new Prime Minister Andy Burnham’s AI-led cabinet overhaul, with the reorganisation moving AI policy closer to the centre of government, as The Tech Capital reported.
Andy Burnham became prime minister on 20 July 2026, succeeding Keir Starmer. Within days, officials and industry figures began discussing the possible scrapping or restructuring of the Department for Science, Innovation and Technology. The favoured option appears to be folding AI responsibilities into a more powerful business department or elevating them to cabinet secretary level.
Such a move would mark a deliberate attempt to treat data centres and the computing capacity they provide as core economic infrastructure rather than a specialist science brief. Industry groups have warned that breaking up DSIT could delay investment. Yet the alternative, leaving policy fragmented across competing departmental priorities, has already produced planning bottlenecks that investors cite as a decisive deterrent.
Data centres require substantial water and energy resources. This has produced community backlash, planning disputes and environmental objections in several regions, including consideration of a moratorium on new facilities in Scotland. The previous government’s announcement of AI Growth Zones in November 2025 sought to streamline infrastructure planning and lower costs in designated areas. Delivery has lagged.
Venessa Moffat, executive director of the Data Centre Alliance, stated that delays to planning decisions and grid connections make the UK less competitive for investors.
A consortium backed by BlackRock, MGX and the Artificial Intelligence Infrastructure Partnership closed a $40 billion acquisition of Aligned Data Centers in July and committed an additional $5 billion in growth capital. The transaction demonstrates continued appetite from global capital for British AI infrastructure when the policy environment permits speed.
