London’s exposure to water stress is becoming increasingly clear. On Tuesday, BusinessLDN brought together business, infrastructure, and policy leaders with Nevil Muncaster, Strategic Water Resources Director at Thames Water, for a member roundtable focused on the water supply challenges facing the capital and how future shortages can be prevented. The session looked at what needs to change to strengthen London’s resilience over the long term, and the role that the business community can play in advocating for progress.
London has experienced two major droughts in the past five years, yet the city remains less resilient than many comparable global cities. Each year, there is a 1 in 100 chance that Thames Water will need to introduce severe water use restrictions, such as temporary use bans and public water collection points. To meet government standards, we need to reduce this to a 1 in 200 chance by the mid-2030s and a 1 in 500 chance by 2040.
A long‑standing focus by successive governments on keeping water bills low has limited investment in long‑term resilience, leaving the system more vulnerable to shocks. The emphasis is changing, with the Cunliffe Review’s laser-like focus on investment, and the proposed introduction of regional planning authorities seen as welcome steps towards a more strategic approach. However, participants were clear that much stronger local community engagement and buy-in will be essential if major infrastructure projects are to move forward more quickly.
The White Horse Reservoir and the Teddington Direct River Abstraction project were highlighted as critical to securing London’s future water supply, but both continue to face significant planning and delivery challenges. There was strong support from participants for the White Horse Reservoir to be designated as critical national infrastructure, which could help simplify planning and reduce uncertainty.
Investment and delivery models were another key area of discussion. The use of the Specified Infrastructure Projects Regulations for the White Horse Reservoir was welcomed as a positive development that should help attract new sources of capital, similar to the delivery model used for the Tideway Tunnel. At the same time, some concern was expressed that the Government’s growing focus on newer financing models risks sidelining approaches that are already working well. The Direct Procurement for Customers model was cited as a proven framework that should continue to be built upon.
What is clear is that new physical infrastructure alone will not be enough. Public awareness of the risks of water scarcity remains low, particularly when compared with cities such as Sydney and Cape Town, where water conservation is widely accepted and part of everyday behaviour. London still lacks a strong “save every drop” culture, increasing pressure on supply unnecessarily. Government has a central role to play in raising awareness, supporting demand reduction, and helping businesses and households understand their role.
There are also risks around skills and capacity. The UK has not built a new reservoir for nearly 40 years, and there is a clear need for sustained investment in education and training across planning, engineering, and construction to support delivery. Without this, even well‑funded projects risk delay.
Reliable water supplies underpin business continuity, housing delivery, infrastructure investment, and investor confidence. By 2050, water scarcity and associated infrastructure failure could cost London’s economy roughly £500m per day. BusinessLDN will continue to make the case for the scale of investment needed, and for the policy and regulatory changes required to deliver it, to make the most of the opportunities from strategic resources in the future.