Ministers are considering increasing water costs for certain users to address severe supply shortages. Nearly three-quarters of England and all of Wales are currently experiencing drought conditions, affecting 27 million people who are under water usage restrictions. The Environment Agency has warned that without intervention, England could face a daily shortfall of 5 billion litres of water by 2055. Helen Wakeham, director of water at the Environment Agency, emphasized that water needs to be valued more highly to close this growing gap. Currently, those seeking permission to extract water, known as abstraction licences, pay only for the administrative costs, not the actual value of the water itself. While many households in England are paying record water bills, large industrial users often pay less the more water they consume. There is an ongoing discussion about whether the way water is valued and priced should be fundamentally changed. The Guardian recently reported that less than 1% of businesses in England use more water than the daily needs of 10 million people. Some of these large users, including oil refineries, chemical plants, and paper mills, are not required to reduce their consumption. As the UK aims to become a global leader in artificial intelligence, concerns are growing about how data centres, which require significant amounts of water for cooling, will secure their water supply. Water UK, the organization representing the UK water industry, has warned that the UK may not have enough water to support the expansion of data centres. Wakeham explained that data centres use so much water because it is currently very cheap. Dr. Doug Parr, a senior scientist and policy adviser at Greenpeace UK, pointed out that major companies can access water at a lower cost per litre the more they use. He urged the revision of abstraction policies and licensing to better suit the challenges of summer droughts and a biodiversity crisis. Currently, Environment Agency regulations require data centres to use drinking water for their operations. Water UK estimated that data centres in England use 6.6 million litres of drinking water daily, and with the government’s goal to triple data centre capacity by 2030, this could rise to 19.8 million litres per day. Jon Chappell, deputy director of Water UK, called this situation “unforgivable” and a “genuine failing of government.” Wakeham acknowledged the issue of drinking water being used for industrial purposes and said the agency is working with the government to explore new pricing and valuation strategies to ensure water is allocated appropriately. She suggested that industrial users might face higher water costs in the future, emphasizing that the low cost of water often leads to inefficient use.