England faces huge future water shortages and needs a “continued and sustained effort” to reduce demand, including more hosepipe bans and ‘smart’ water meters, warns the Environment Agency.

The watchdog says that without dramatic action, England, which uses 14 billion litres of water a day, will have a daily shortage of more than six billion litres by 2055.

It says more homes will need meters reporting how much water is used in real time and in future prices may need to rise when supplies are tight.

The warning came with droughts already declared in Yorkshire and the north-west of England this year following what the Met Office says is the warmest and driest Spring in more than half a century.

The EA made the warning in its five yearly National Framework for Water Resources report. It said 5 billion litres would be needed to supply the public and a further 1 billion for agriculture and energy users.

The EA said customers in England need to cut their water use by 2.5 billion litres a day by 2055 – down from an average of around 140 litres per person per day to 110 litres per day.

It warns future economic growth will be likely be compromised as water becomes scarcer and has already highlighted how water shortages in parts of Sussex, Cambridgeshire, Suffolk and Norfolk have limited housing and business growth.

Alan Lovell, the chair of the EA, told the BBC he would like to see water companies making more use of restrictions like hosepipe bans when there are droughts to “bring home to people that the amount of water they use is making a difference.”

The EA highlights England’s growing population as a key driver of the deficit. Water companies expect it to increase by 8 million people by 2055.

At the same time, climate change is altering weather patterns, creating new challenges for water supply.

The EA says England – like the rest of the UK – is already experiencing warmer, wetter winters and hotter, drier summers. It expects that trend to become more pronounced and warns of more intense rainfall events creating the potential for a greater incidence of both drought and flooding.

Another key factor is the need to reduce how much water is taken – or “abstracted” – by water companies and other users from England’s rivers, the report says.

Over-abstraction risks wrecking some rivers, particularly the fragile ecosystems of the country’s chalk streams, said Mr Lovell.

“It ultimately could see the demise of those rivers to an extent that they will never come back in the same form,” he told the BBC.

Adding to the pressures on supply is the fact that water companies plan to dramatically increase their drought resilience. By 2040 they aim to cope with the kind of drought you would expect once in every 500 years.

Professor Hannah Cloke, a hydrologist at Reading University, believes we need to change our attitude towards water.

“We really don’t value water,” she says. “We need to think about it as a really, really precious resource.

“Everybody should be looking after water and conserving it and thinking about what they do when they turn on the tap and when they choose not to.”

Everyone involved in the water industry, including domestic customers, will need to play a role in meeting the deficit, the EA says.

It says it is “vital” that water companies deliver on their promise to cut the amount of water that leaks from their pipes by half by 2050 compared to 2017-18 levels. That should save around 900m litres a day.

New infrastructure will play a role too. Last year water companies were given the go-ahead by Ofwat, the body that oversees the water industry, to invest billions of pounds in ten new reservoirs and two desalination plants as well as pipelines and other equipment to enable more water to be transferred between regions.

The aim is to create a “water grid” in the southern half of England, said Bob Taylor, the CEO of Portsmouth Water.

“We’re also looking at using existing rivers, canals and other means to transfer water from areas where it is plentiful in the UK to the south east and east of the country where it is less plentiful,” Taylor explained.

These new investments should ultimately deliver an additional 1.7 billion litres a day, the EA report calculates. But the first reservoir won’t be completed until the end of this decade and the programme isn’t due to be finished until the early 2040s.

A further 2.5 billion litres a day will have to found by reducing customer demand, including from domestic customers, the EA says. And, because of the delays delivering the new infrastructure, initially up to 80% of the deficit will need to be met by customers using less water.

As well as water companies switching customers to the kind of smart meters and variable pricing already seen in the electricity industry, the EA is calling for the government to tighten building regulations on water use of new homes and consider minimum standards for water efficiency of products.

The EA report highlights the rapid growth in the number of data centres in England as an area of growing industrial demand for water.

Pip Squire, head of sustainability at Ark Data Centres, says water companies need to be much clearer with industrial customers about how much water they have available and how resilient the supply is.

“We need to know what the constraints are so we can design the system,” said Squire. “We need energy, we need fibre optic connections, but we can build data centres that don’t use water. They just cost more to run.”