Power provision is archaic, too: spikes and drops are common, particularly during major events like the Olympics and the Golden Jubilee.
Really now? When, where, how long? Where's the data? The UK's power grid is generally considered world-beating. The whole nuclear replacement issue is a joke and the renewables future strike prices are utterly absurd - but generally speaking it's rock solid. I can tell you the stories of the guys I know who work in a New York data center who were hit by a huricane - basement was under water, gens were literally on fire and they couldn't get fuel in and the connectivity was sporadic. I have a photo from their Chicago office's whiteboard where they used Zots (the Sim City graphics) to explain the situation. This has never ever happened in London.
Transport is another issue, with data centre operator Interxion installing sleeping pods on the co-location floor during London 2012 to provide staff availability and ensure travel disruption didn't translate into service distruption for its customers.
Transport in London isn't any sort of issue. The Olympic thing never materialised, those of us who live in London will tell you there were way less people than normal and in any event there's generally multiple ways to get to things. Nobody actually builds DCs right in the centre of London and there's plenty of cheap land around and dark fibre and it's not too expensive to have your own cable runs put in.
The fact that London is a major DC hub is the clue that the argument is nonsense. London has it's issues but it's generally a safe place to be and even major events like riots and Olympics (which are one in 50 year events anyway) haven't managed to cause any major disruption. Even when London has been hit by terrorists things have got back to normal PDQ.