The UK government is to launch a “data centre covenant” prioritising grid power connections for critical facilities.

The programme involves “strict tests” that data centres must meet to invest in local communities, create local jobs and protect local water supplies, said chancellor John Healey.

He said critical data centres, such as those offering services to the NHS or the armed forces, would receive priority for grid connections.

Critical infrastructure

If connections are delayed, such facilities would be allowed to build on-site power generation while they wait, Healey said.

The government is to offer a new AI Challenge Prize to find innovative uses for AI in public services, along with a union learning plan for workers, Healey said.

He framed the initiative as a way to prioritise sensitive UK data on British soil, using British AI tools.

Sensitive data

“When the NHS uses AI to treat patients, we want that data here. When our armed forces use AI to keep us safe, we want that data here,” Healey said in delivering the Budget on Wednesday.

Critics have expressed concerns around public sector contracts with US firms such as Palantir, which notably processes sensitive NHS patient data under a contract with the health service.