Chancellor Healey announces new deal for UK data centres

The UK government wants more computing power, and it is putting money behind the idea. Chancellor Healey has unveiled a new AI investment package aimed at data centre development, announced on October 24, 2026, ahead of the Autumn Budget.

The package sits under the AI Opportunities Action Plan and commits hundreds of millions in funding. The goal is a stronger domestic AI backbone. The obstacle is an electricity grid that has already cost the country at least one high-profile project.

What is in the package

First up is an AI Economics Institute. It gets £10 million per year to study how AI is reshaping employment.

The bigger line item is a £165 million National AI Biosecurity Initiative. Of that, £100 million is earmarked for what the government describes as a world-first AI Biosecurity Lab in the UK.

The funding also supports AI chip design work in Edinburgh. Manchester, meanwhile, is set to host a new AI Centre of Excellence.

The 6GW problem

All of this feeds into a broader target. The government wants a threefold increase in the UK’s computing capacity, reaching 6GW by 2030.

That is where the plan runs into reality. Microsoft withdrew from a planned Nscale project in Loughton, which was designed for 50MW of capacity. The reason was power grid delays. Projected availability for the site stretched into the 2030s.

How we got here

This is not the government’s first pass at the problem. In September 2024, data centres were designated as critical national infrastructure.

In November 2025, a policy paper set out reforms for AI Growth Zones. The programme aims to reform planning rules and provide energy pricing support for qualifying sites.

It also offers local authorities in England 100% business rate retention over 25 years. Councils that host these projects get to keep the business tax revenue they generate for a quarter of a century.

Healey’s latest announcement builds on that framework. It pairs the growth agenda with stated priorities around workforce protections and national security.

What this means

The Microsoft and Nscale episode shows the risk clearly. Money can be allocated in an afternoon, while transmission capacity takes years to build. A 6GW target by 2030 leaves limited room for further delays of the kind that pushed the Loughton project’s power availability into the 2030s.

For the regions, the package offers a share of the AI buildout beyond the usual hubs. Edinburgh gets chip design support and Manchester gets a centre of excellence.

For investors and operators watching UK infrastructure, the key items to track are the Autumn Budget itself, the pace of AI Growth Zone approvals, and any concrete changes to how quickly new data centres can connect to the grid.