Land Surface Models simulate the exchange of water and energy cycle between the surface and the lower atmosphere and are widely used for hydrological applications. However, they commonly ignore the impact of groundwater flow on land surface processes, usually relying on the free drainage approximation. This affects the realism of the model and consequently the water partitioning. The impact of explicitly representing groundwater in an LSM is studied in this thesis to explain and quantify its effects on the water balance components at the land surface. The Joint UK Land Environment Simulator (JULES) model is used in this analysis. The limitations of JULES to simulate runoff are first investigated in 47 British catchments. The missing groundwater representation and the low performance of JULES in groundwater dominated catchments motivated us to develop a 2-D groundwater model below JULES soil domain. The new model, called JULES Groundwater Flow Boundary (JULES-GFB), has been extensively tested against two synthetic experiments (i.e., a column-scale infiltration and a tilted-V catchment experiment) as well as applied to a real-case experiment. JULES-GFB improves soil moisture dynamics, while successfully representing lateral water flow in the saturated zone, and consequently better estimating the contribution of groundwater to river discharge, when compared to its default model version. Model evaluation of JULES-GFB in a region characterized by groundwater-dominated catchments in Great Britain shows an increase of model performance relative to catchment-integrated streamflow and evapotranspiration. The new model is used to assess the climate change impact using the UKCP18 climate projection dataset. After bias correction is applied to the meteorological data, 25 different 5-year periods are picked to represent climate scenarios with different change of precipitation and temperature compared to the climatological values. Results show that runoff could decrease up to 23% and recharge up to 90% under extreme dry and warm conditions.