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New figures published today by the Environment Agency show that one in every five days saw flooding in 2012, but one in four days were in drought, including hosepipe bans affecting over 20 million people. Rivers such as the Tyne, Ouse and Tone went from their lowest to their highest flows since records began, all in the space of four months.

In 2012 Environment Agency flood defences protected 200,000 homes and businesses and over 6,000 flood warnings and alerts were issued.

New Met Office analysis suggests that the UK could experience a severe short term drought, like the one experienced in 1976, every ten years, and with the population in London and the already water-stressed south east of England set to grow by 23 per cent by 2035, the time to act is now.

Water storage reservoirs are one of the options for securing a more reliable water supply for irrigation, mainly used by farmers, but also commercial turf growers, golf clubs, sport stadiums and race courses. There are around 1,700 small-scale storage reservoirs across England and Wales, supplying 30 per cent of total irrigation needs. This will need to increase to help improve the resilience to future dry periods.

Lord Smith said: “The extremes of weather that we saw last year highlight the urgent need to plan for a changing climate.

"In 2012 we saw environmental damage caused by rivers with significantly reduced flows, hosepipe bans affecting millions and farmers and businesses left unable to take water from rivers. But we also saw the wettest year on record in England, with around 8,000 homes flooded. Interestingly 2007 – which saw some of the most severe flooding in recent memory – also started the year with hosepipe bans.

"More of this extreme weather will exacerbate many of the problems that we already deal with including flooding and water scarcity, so taking action today to prepare and adapt homes, businesses, agricultural practices and infrastructure is vital.”

Pressures on water availability, including extreme weather events, growing demand and historic over abstraction are already affecting the availability of water supplies for irrigation. Businesses that rely on water from rivers have been unable to abstract water in the summer.

Modelling suggests that a changing climate could reduce some river flows by up to 80 per cent during the summer in the next 40 years – increasing the challenge of ensuring there is enough water for people, business, farmers and the environment.

Water companies, farmers and other businesses are being urged to look at ways to improve water storage, and reduce and share the amount of water they use.

The Environment Agency is at the forefront of efforts to increase the country's resilience to flooding and water scarcity. During the 2012 drought the Environment Agency granted drought permits to five water companies to ensure that 16.5 million people continued to have water.

Flood defences opened by the Environment Agency last year include Nottingham, protecting 16,000 properties, Keswick, protecting nearly 200 properties and Banbury, protecting over 500 properties in the next few years. More than 64,000 more homes will be better protected from the devastating effects of flooding as 93 new flood defences have been given the green light to start construction this year.

The Environment Agency’s 'Climate Ready' Service offers practical advice to businesses, farmers and councils to help them be better prepared to deal with extreme weather like floods and drought.