2026 is set to be a pivotal year for the UK rail sector and for rail skills. Long-awaited reforms, major legislative milestones, and significant changes to skills policy will all converge. This briefing identifies key developments expected for rail and skills in 2026. It highlights the opportunities these changes present, the associated risks, and other important issues businesses in the sector should consider.
Rail
Railways Bill
The Railways Bill is now well advanced in Parliament, undergoing detailed, line-by-line scrutiny in a Public Bill Committee, with this stage of the process set to conclude in February. The Bill is anticipated to receive Royal Assent and become law by summer, paving the way for the next critical stage of reform: the establishment of Great British Railways (GBR), which is expected to be fully operational by summer 2027.
Accordingly, there is likely to be a myriad of consultations over the next year on the exact nature of GBR’s governance and structure.
GBR Draft Licence
The GBR draft licence will outline in greater detail how Great British Railways is expected to operate, providing clarity on responsibilities including network management, service delivery, and passenger standards. It will also specify requirements for transparency, accountability, and reporting, providing greater clarity on GBR’s operating model. The government has given assurances that the draft licence will be published during the passage of the Railways Bill, meaning it should be available in the coming months.
Major Operator Nationalisations
Following a number of train operators being brought into public ownership in 2025, several more are expected to follow suit in 2026, outlined in the table below:
| Chiltern Railways | March 2026 |
| Govia Thameslink Railway | June 2026 |
| Great Western Railway | September 2026 |
| East Midlands Railway | December 2026 |
Rolling Stock Strategy
The Secretary of State for Transport has announced that the long-awaited rolling stock strategy is likely to be published in summer 2026. This will be the UK’s first comprehensive rolling stock strategy in over 30 years. It is expected to provide manufacturers with long-term visibility of the order book, ending the damaging boom-and-bust procurement cycles that have made it difficult for the supply chain to plan investments and retain skilled workers. Accessibility will also likely be a prominent focus, addressing inconsistencies in train design across the network. Additional measures are likely to include broader standardisation across the fleet and infrastructure, enabling GBR to deploy trains more flexibly and simplify maintenance regimes.
Long-Term Rail Strategy
The Railways Bill establishes a statutory duty on the Secretary of State for Transport to produce a 30-year Long-Term Rail Strategy (LTRS), which is expected to be published in summer 2026. The strategy aims to address fragmented rail planning and present a coherent, long-term vision for growth, sustainability, and financial stability. It will also align rail infrastructure planning with wider government priorities, including housing delivery, employment, and economic growth.
The industry has long called for this kind of long-term strategic framework and will therefore welcome the commitment. There is a consensus that a clear articulation of what a modern railway is expected to deliver is essential, as all subsequent policy and investment decisions flow from this. The development of a 30-year strategy, therefore, represents a critical opportunity to define that purpose and provide a stable foundation for future reform and investment.
Northern Powerhouse Rail
After a series of delays, an announcement from the government on the initial plans for Northern Powerhouse Rail is expected early this year. There are, however, concerns that the scope could be scaled back due to tight fiscal constraints. Regardless, we can almost certainly expect a highly phased approach to delivery.
Full details are not yet available, but the project is expected to include a new line between Manchester Piccadilly and Manchester Airport, as well as a new route connecting Bradford and Huddersfield. Other parts of the project, such as the much-publicised Manchester–Liverpool high-speed line, remain uncertain.
This announcement will be critical, as decisions on which elements proceed will have a significant impact on skills and workforce demand, making careful planning essential for the industry.
Skills and Workforce
Growth and Skills Levy
The biggest change in skills policy in 2026 will be the rollout of “Apprenticeship Units,” set to launch in April 2026. Under the new arrangements, employers can use levy funds for short courses lasting from one week to three months, rather than being restricted to multi-year apprenticeships. Initial focus areas will include digital skills, AI, and engineering, with wider expansion expected over time.
Shorter Minimum Apprenticeship Durations
As a result of the government’s skills reforms, some standards will be able to be delivered in under 12 months, and in some cases as little as eight months.
Youth Guarantee
The UK Government’s Youth Guarantee, funded by an £820 million package announced in the Autumn Budget, aims to support nearly one million young people in 2026 through training, education, and guaranteed paid work placements. A specific “Jobs Guarantee” within the broader program provides fully subsidised, paid work for long-term unemployed young adults. This represents a real opportunity for the sector to tackle rail skills shortages while unlocking significant social value. NSAR will be actively monitoring the development of this.
Skills in the DWP Era
Now that the transition of Skills Policy and Skills England to the Department for Work and Pensions (DWP) has been bedded in, we will begin to see the impact of this change. This shift brings both challenges and opportunities.
Opportunities include alignment with the government’s Get Britain Working Role goals. The move toward linking welfare to work places a stronger emphasis on vocational training, creating a receptive environment for rail’s social value and regional growth initiatives. Rail is well-positioned to support the DWP’s mission by providing high-quality, long-term careers in areas of high economic inactivity.
Challenges include the risk of a “Level 2 & Short-Termism Trap.” Immediate job creation pressures may tilt focus toward Level 2 qualifications. This approach delivers quick wins but does not meet the sector’s need for longer-term, higher-level technical skills (Levels 3–5. Furthermore, there are some concerns that the DWP’s main focus on pensions and benefits could divert attention from prioritising skills.
Devolution of Skills Decision Making
Throughout 2026, much of the announced devolution of skills policy to mayoral and combined authorities will begin to take effect. Under this change, authorities will receive integrated funding settlements, replacing ring-fenced grants with a single, multi-year budget. This gives local leaders far greater control over training, adult education, and employment programmes, allowing them to tailor initiatives to regional needs and potentially reshape the nature of training nationwide.
We are already seeing early impacts of these changes. For example, some authorities have replaced national Skills Bootcamps with locally tailored alternatives. Mayors are also gaining far greater influence over Local Skills Improvement Plans (LSIPs), enabling alignment of regional training with Local Growth Plans. In addition, a pilot programme will allow local authorities to connect young people, particularly those not in education, employment, or training, with apprenticeship opportunities at local employers, using labour market insights to match training with employer needs.
These policy changes could have a significant impact on the rail sector, particularly in regions where authorities are pursuing major projects or where the sector has a substantial presence. Localised training initiatives and apprenticeships could help address regional skills shortages and better align workforce development with the sector’s needs.
If you would like to discuss any of the issues in this briefing, please get in touch with NSAR Head of Policy and Engagement: edward.hughes@nsar.co.uk