Managing water–human systems during water shortages or droughts is key to avoid the overexploitation of water resources and, in particular, groundwater. Groundwater is a crucial water resource during droughts as it sustains both environmental and anthropogenic water demand. Drought management is often guided by drought policies, to avoid crisis management, and actively introduced management strategies. However, the impact of drought management strategies on hydrological droughts is rarely assessed. In this study, we present a newly developed socio-hydrological model, simulating the relation between water availability and managed water use over 3 decades. Thereby, we aim to assess the impact of drought policies on both baseflow and groundwater droughts. We tested this model in an idealised virtual catchment based on climate data, water resource management practices and drought policies in England. The model includes surface water storage (reservoir), groundwater storage for a range of hydrogeological conditions and optional imported surface water or groundwater. These modelled water sources can all be used to satisfy anthropogenic and environmental water demand. We tested the following four aspects of drought management strategies: (1) increased water supply, (2) restricted water demand, (3) conjunctive water use and (4) maintained environmental flow requirements by restricting groundwater abstractions. These four strategies were evaluated in separate and combined scenarios. Results show mitigated droughts for both baseflow and groundwater droughts in scenarios applying conjunctive use, particularly in systems with small groundwater storage. In systems with large groundwater storage, maintaining environmental flows reduces hydrological droughts most. Scenarios increasing water supply or restricting water demand have an opposing effect on hydrological droughts, although these scenarios are in balance when combined at the same time. Most combined scenarios reduce the severity and occurrence of hydrological droughts, given an incremental dependency on imported water that satisfies up to a third of the total anthropogenic water demand. The necessity for importing water shows the considerable pressure on water resources, and the delicate balance of water–human systems during droughts calls for short-term and long-term sustainability targets within drought policies.