Government departments come under fire for not allowing for water shortages on future developments.
John Prescott's former department has been criticised for not taken water shortages into consideration when planning new developments.
A Lords committee said that the ODPM was one of the government departments that had not done enough on water management. The science and technology committee chairman Lord Selborne said that there was "quite a muddle" over water demand.
Committee chairman Lord Selborne criticised the lack of planning in the South East. He said: "If you're going to put 200,000 homes into an area, you have got to start planning the reservoirs, the pipes, the cleaning plants for the water, everything like that at least ten, probably 15 years ahead, and of course in this country we're not good at long-term planning."
The report said that the government must work harder to integrate environmental, social and economic interests in the management of water.
The committee said that more should be done to cut leaks from water pipes. It was also concerned that water watchdog Ofwat was not taking the problem of water scarcity seriously enough.