Yes, there are loops of water.
But evaporative cooling is used by less sustainable data centers to release the heat from the cooling loops.
Which is what UK government is concerned about: Unsustainable use of water by data centers.
UK government classifies data centers as Critical National Infrastructure. Which means they have some responsibility for their uptime and security, but also their sustainability and environmental impact.
The rapid growth of AI data centers with their massive power consumption and cooling requirements are not included in UKs water planning and projections.
So, that's what this report is about.
And the UK government is recommending the public should delete old emails and pictures to reduce load on data centers.
Which is the kind of out-of-touch misinterpretation (or misrepresentation) of the information in the report thats inline with conclusion of "buy a new kettle" from a report that probably said "old fridges can be inefficient".