UK Rail at a Turning Point as MPs Warn of Skills Shortages—and a Rare Chance for Reform

A new parliamentary report has raised serious concerns about the future of the UK’s rail manufacturing workforce, warning that growing skills shortages could undermine the sector just as it faces a rare opportunity for renewal, expansion, and long-term resilience.

Published on 28 January 2026, the Transport Committee’s report Engine for Growth: securing skills for transport manufacturing calls for urgent, joined-up action from government, industry, and training providers. For rail, the message is stark: without sustained investment in skills development, apprenticeships, and recruitment pathways, the UK risks losing ground to international competitors at a time when technological change and net-zero targets are reshaping the industry.

Skills Gaps Deepening Across Rail

While skills shortages affect transport manufacturing more broadly, the Committee highlights rail as one of the sectors facing the most acute pressures. Evidence from the National Skills Academy for Rail (NSAR) points to significant future workforce gaps, driven by high retirement rates, staff attrition, and a growing mismatch between existing skills and emerging technological demands.

The report warns of an approaching “retirement cliff-edge”, with large numbers of experienced workers set to leave the industry over the coming years.

At the same time, digitalisation, automation, and decarbonisation are transforming roles across rolling stock engineering, signalling, operations, and asset management. Employers increasingly require staff who can work confidently with advanced equipment, data-driven systems, and real-time operational tools.

Competition for talent is also intensifying. Many of the most sought-after capabilities—such as leadership, commercial awareness, procurement, and project management—are highly transferable across manufacturing sectors. As the report notes, skills are no longer siloed: workers with the right foundations can move easily between industries.

A Once-in-a-Generation Opportunity

Despite these challenges, the Committee describes the current moment as a pivotal one for rail. Ongoing legislative reforms, particularly the creation of Great British Railways (GBR), could fundamentally reshape how the industry plans for investment, workforce development, and long-term capability.

Giving evidence to the Committee, RMT General Secretary Eddie Dempsey described GBR as a “once-in-a-generation opportunity” to take a strategic, long-term view of skills across the transport sector. He argued for a national apprenticeship scheme that could provide a clear, unified entry point into rail, while also equipping workers with transferable skills relevant to other advanced manufacturing industries.

Such an approach could help address a long-standing weakness in rail: fragmented entry routes and uneven training standards. The Committee echoed this concern, warning that many existing apprenticeship and technical education standards are outdated and do not always reflect employers’ current or future needs.

Apprenticeships Under the Microscope

With the apprenticeship system set to change—including the introduction of the new Growth and Skills Levy—the report urges ministers to ensure that funding can be used more flexibly across the transport supply chain. Manufacturers told MPs that current rules often limit their ability to train staff effectively or respond quickly to changing skills demands.

The Committee also raised concerns about the withdrawal of funding for certain Level 7 apprenticeships, warning that this could undermine the supply of highly experienced and specialist workers. It called for continued support for advanced training in sectors critical to economic growth, including rail.

Given the industry’s increasing reliance on specialist engineering, digital expertise, and low-carbon technologies, these recommendations are likely to resonate strongly with rail employers planning for the next decade.

Regional Clusters and Local Influence

The report also highlights the role of regional manufacturing clusters in driving skills development and economic growth—an approach that could benefit established rail hubs such as Derby, Crewe, and Newton Aycliffe. The Government’s Modern Industrial Strategy identifies transport manufacturing as a key contributor to national competitiveness, alongside priority areas including automotive, batteries, aerospace, and advanced materials.

Although rail is not listed as a standalone “frontier” sector, it intersects with all of these areas through shared technologies, supply chains, and engineering expertise. As battery systems, automation, AI-enabled maintenance, and lightweight materials become standard in future rolling stock, rail firms may benefit indirectly from targeted support for these wider industrial clusters.

The Committee also points to the growing role of local authorities in shaping procurement and investment decisions. While much of this relates to buses, similar principles could influence future rail procurement—particularly if domestic industrial content becomes a stronger policy priority.

The Need for Joined-Up Government Action

A recurring theme throughout the report is the need for better coordination across government. Responsibility for skills policy now largely sits with the Department for Work and Pensions, while the Department for Transport, the Department for Business and Trade, and Skills England all influence workforce priorities.

Local Transport Minister Lilian Greenwood MP underlined the importance of alignment, telling the Committee:

“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 this clearer than in transport manufacturing, where the pace of technological change and the demands of the green transition require a workforce that is agile, skilled and future-ready.”

Her emphasis on supporting British manufacturers to compete globally highlights what is at stake for rail, particularly as UK firms vie for international rolling stock and infrastructure contracts.

What It Means for the Rail Industry

For those working across UK rail, the report delivers both a warning and a window of opportunity:

• Skills shortages are growing and increasingly driven by technology.

• Apprenticeship reform will be critical to future workforce stability.

• A more coordinated national approach to skills may finally be taking shape.

• The creation of GBR could reset long-term skills planning.

• Rail must present itself as a modern, high-tech, and attractive career choice.

The Committee concludes that the UK has the talent needed to remain a global leader—but only if decisive action is taken now. For the rail sector, the choices made over the next few years may shape its competitiveness for decades to come.