A new Transport Committee report has cast a sharp spotlight on the future of Britain’s rail manufacturing workforce, warning of intensifying skills shortages while highlighting a rare “once-in-a-generation opportunity” for the sector to modernise, expand, and secure long-term stability.
Published on 28 January 2026, the report—Engine for Growth: securing skills for transport manufacturing—calls for coordinated action across government, industry, and training providers. For the rail sector, the message is clear: without sustained investment in skills, recruitment pipelines, and apprenticeships, the UK risks falling behind global competitors at precisely the moment when new technologies and net‑zero ambitions are reshaping the industry.
Rail Skills Shortages Growing
The Committee notes that transport manufacturing as a whole is grappling with acute skills shortages, but rail has some of the most pressing gaps. According to the National Skills Academy for Rail (NSAR), the sector faces “projected workforce shortfalls ‘driven by high retirement and attrition rates’ and potential skills gaps in the face of emerging technology and net zero challenges.”
This looming “retirement cliff‑edge” is part of a wider trend across transport manufacturing. The report warns that as digitalisation, automation, and sustainability transform rolling stock engineering, signalling, operations, and asset management, rail employers urgently need a workforce able to engage with advanced machinery, data analytics, and real‑time decision systems.
The challenge is compounded by competition for talent across neighbouring sectors. Skills considered “cross‑cutting”—such as leadership, commercial expertise, procurement and project management—are increasingly in demand throughout transport manufacturing. As the report puts it, “If you can make biscuits, you can make batteries.”
A Moment of Opportunity for Rail
Despite the challenges, the report positions the present moment as a pivotal one for rail. The Government’s legislative focus—especially the creation of Great British Railways—could reshape industry structure, investment flows, and long-term skills planning.
Eddie Dempsey, General Secretary of the RMT, told the Committee that establishing GBR is a “once-in-a-generation opportunity to think strategically about the long-term skills needed in the transport sector.” He further advocated for a national apprenticeship scheme that “could act as a single point of entry into the railway industry and also equip people with transferable skills for other high-tech manufacturing roles.”
For rail businesses, this could mark the beginning of a more coherent pipeline, addressing one of the sector’s long‑standing problems: fragmented entry routes and inconsistent training standards. The Committee echoes this concern, stating that “apprenticeship standards and other technical education standards can be outdated and do not always meet the skills requirements of employers.”
Apprenticeships: Reform Needed, Flexibility Essential
With the apprenticeship system undergoing major reform—including the introduction of a new Growth and Skills Levy—the report urges government to ensure that levy funding can be used flexibly throughout the transport supply chain. Manufacturers told the Committee that current restrictions hamper their ability to train and retain talent effectively.
The report also warns that removing funding for certain Level 7 apprenticeships “risks jeopardising the supply of experienced and highly skilled workers for the transport manufacturing sector,” calling for support to be reinstated for growth‑critical industries—including rail.
Given rail’s increasing dependence on specialist engineering, digital systems, and green technologies, these recommendations will resonate strongly with employers trying to plan for the next decade.
Regional Growth, Clusters, and the Role of Local Authorities
The Committee highlights the potential of regional manufacturing clusters—an approach that could benefit rail hubs such as Derby, Crewe, Newton Aycliffe and others. The Government’s Modern Industrial Strategy identifies transport manufacturing as central to Britain’s industrial competitiveness, with “Automotive, Batteries, Aerospace, and Advanced materials” among the frontier industries it intends to back.
Though rail is not singled out as a separate frontier category, the sector cuts across all four through shared technologies, supply chains, and engineering specialisms. Many rail employers may therefore benefit indirectly from these clusters, particularly where battery systems, automation, AI-enabled maintenance, and lightweight materials become standard in future rolling stock.
Local authority powers—especially in relation to buses—are also noted. While not directly rail-related, these developments in procurement rules and public investment culture could influence future rail procurement models, especially if UK industrial content becomes a policy priority.
A Call for Government Coordination
Throughout the report, the Committee stresses the need for cross‑departmental alignment. Skills policy now sits primarily with the Department for Work and Pensions, while the Department for Transport, Department for Business and Trade, and Skills England all have roles in shaping workforce priorities. The Minister for Local Transport, Lilian Greenwood MP, emphasised the importance of this coordination, stating:
“Ensuring businesses have a diverse workforce with the right skills is absolutely pivotal to delivering the Government’s ambition to drive economic growth, productivity and innovation. Nowhere is that more clear than in transport manufacturing, where […] the pace of technological change and the demands of a green transition require a workforce that are agile, skilled and ready for the future.”
Her recognition that “We want to support British manufacturers to be competitive in the global marketplace” reinforces the stakes for rail—an industry where UK suppliers must compete internationally for rolling stock contracts.
What This Means for UK Rail Stakeholders
For rail staff and management, the report is both a warning and an opportunity:
- The skills gap is real, widening, and technologically driven.
- Apprenticeship reform will matter hugely.
- A coordinated national approach may finally be emerging.
- GBR’s formation could reset the long‑term skills strategy.
- Rail must position itself as an attractive, modern, high‑tech career pathway.
As the report concludes, the UK has the talent to remain a global leader—if it acts now. For the rail sector, the next few years may define its competitiveness for decades to come.
Image credit: iStock
