The Environment Agency (EA) has warned that England faces 5 billion litre a day shortfall for public water supplies by 2055 – and a further 1 billion litre a day deficit for wider economy - without further action to future-roof resources.
Supplies are being impact by climate change, population growth, and environmental pressures.
The analysis is outlined by the Environment Agency’s National Framework for Water Resources.
The EA expects 60 per cent of this deficit to be addressed by water companies managing demand and dramatically reducing leaks. The remaining 40 per cent would come from boosting supply, including the building of new reservoirs and water transfer schemes.
The government has already secured £104 billion in private sector spending in water company infrastructure over the next five years, including £8 billion committed to boost water supply and manage demand.
The report notes several recommendations and actions including that the EA will continue to work with financial regulator Ofwat on water company pledges to cut leakage by 17 per cent in the next five years and by 50 per cent by 2050.
Water companies have already committed to the rollout of ten million more smart meters to help customers understand how much they use. The average person on a meter uses 122 litres per day, compared to 171 litres without.
The EA will also continue to work the government on a mandatory efficiency labelling scheme for household appliances such as dishwashers, toilets, and showers.
Environment Agency Chair, Alan Lovell, said: "The nation’s water resources are under huge and steadily increasing pressure.
"This deficit threatens not only the water from your tap but also economic growth and food production. Taking water unsustainably from the environment will have a disastrous impact on our rivers and wildlife.
"We need to tackle these challenges head-on and strengthen work on co-ordinated action to preserve this precious resource and our current way of life."
Ofwat chief executive, David Black, said: "We recognise the unprecedented pressures on our water resources and the ambition to further cut abstraction to improve river health, which we strongly support. This is why we announced £8bn of funding at Price Review 2024 to deliver the required action across the sector to secure our future water supplies.
"Boosting supply through building critical water infrastructure is essential to safeguard supplies of drinking water. The way is now clear for the water industry to build on the success of the recently opened £5 billion Thames Tideway project by stepping forward to deliver an expanded pipeline of 30 major projects which we need in England and Wales."
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