The UK’s transport manufacturing sector – spanning rail, automotive, aerospace, and maritime industries – is facing a pivotal skills challenge. A new House of Commons Transport Committee report urges swift action to tackle acute skills shortages while seizing the once-in-a-generation opportunities of decarbonisation and technological change.
The report highlights that manufacturers are confronting widespread talent gaps just as they strive to develop cleaner, smarter vehicles and infrastructure. This convergence of a skills crunch and the net zero transition raises a pressing question: how can we equip the workforce to ensure the sector continues to thrive?
A Sector Under Pressure
Britain has a proud legacy of building trains, cars, planes and ships, yet today’s industry leaders voice growing concern over skills shortfalls. Evidence gathered by MPs found critical vacancies across all transport manufacturing fields, from skilled welders and electricians in rail and bus fabrication, to engineers and technologists in automotive and aerospace production. Demographic shifts are compounding the issue – waves of retirements and attrition are eroding experienced ranks faster than new entrants are being trained. At the same time, the push towards net zero technologies is fundamentally reshaping industry needs. As one automotive trade body testified, “the journey to net zero has transformed the skills required across transport manufacturing.” In short, companies are struggling to recruit and retain the talent needed to build the next generation of greener, smarter transport.
These challenges are intensified by the pace of innovation. Transport manufacturers are adopting advanced processes and materials to meet climate targets and productivity goals. Yet if existing workers aren’t upskilled – and if new workers aren’t attracted into the field – the sector risks falling behind global competitors. Skills shortages, if left unaddressed, could become a brake on Britain’s ambitions in electric vehicles, high-speed rail, sustainable aviation and clean maritime. The Committee’s report makes clear that boosting the skills pipeline is not just a workforce issue, but a strategic imperative to ensure UK transport manufacturing remains an engine for growth in the economy.
A Changing Skills Profile
Underlying these shortages is a significant shift in the skillset demanded by modern transport projects. Three core trends are driving this change: electrification, digitalisation and clean-energy technologies. In practice, this means manufacturers need more workers proficient in high-voltage electrical systems, battery engineering and alternative fuels (such as hydrogen or sustainable aviation fuel). Equally, there is surging demand for software and data specialists as vehicles and infrastructure become more intelligent and connected. From autonomous train control systems to AI-driven production lines, digital skills are now as essential on the factory floor as traditional mechanical expertise.
Another emerging need is for systems integration and cross-disciplinary know-how. As transport platforms become more complex – blending electrical, mechanical, and digital components – companies value employees who can work across specialties and coordinate entire systems. Sector experts call this “associative thinking” or “cross-cutting” skill, reflecting the ability to collaborate across engineering, IT, and data domains. At the same time, many foundational skills remain critical: the industry still requires machinists, fabricators, technicians and engineers in large numbers. But even these roles increasingly involve working with advanced automation or managing new materials. In short, the skill profile is evolving: fewer purely low-skilled jobs and many more roles focused on cutting-edge technology, sustainability, and integration. The workforce of the future must be adaptable and ready to continuously learn as transport manufacturing transforms.
Key Policy Recommendations for Skills Growth
To address these challenges, the Transport Committee’s report lays out a series of policy recommendations. These measures aim to strengthen training pathways, remove barriers to mobility, and better align workforce development with industry needs. Notable recommendations include:
- A Department for Transport-led review of vocational training effectiveness: The DfT should collect feedback annually from transport manufacturers on how well the UK’s vocational and apprenticeship system is delivering the skills they need. This evidence would be shared across government to drive improvements in technical education and ensure young people leaving school or college are prepared for careers in transport manufacturing.
- Introducing a ‘competency passport’ for workers: The newly established Skills England agency is urged to explore a skills “passport” system. This would record workers’ qualifications and competencies in a standard way, making it easier for people to transfer between roles or subsectors. For example, a technician in automotive could more readily bring their expertise into rail or aerospace manufacturing during talent shortages, and vice versa. Harnessing these transferable skills would improve flexibility and retention across the entire transport manufacturing workforce.
- Reinstating Level 7 apprenticeship funding for over-22s: The Committee warns that the Government’s recent removal of funding for higher-level (Level 7) apprenticeships for those aged 22 and above is short-sighted. These advanced apprenticeships – equivalent to master’s degree level – are crucial for developing experienced, highly skilled specialists (for instance, chartered engineers or systems designers). The report concurs with calls to restore funding for Level 7 apprenticeships for all ages, at least in key growth sectors, to ensure a pipeline of expert talent is not cut off.
- Greater flexibility in using apprenticeship levy funds: Transport employers broadly support the apprenticeship levy, but strict rules on spending it are seen as limiting. The report recommends increasing the flexibility of the levy (soon transitioning into a new Growth and Skills Levy) so companies can invest more creatively in skills. This could mean allowing levy funds to cover modular training courses, upskilling of existing staff, or sharing funds with smaller suppliers – rather than only full-length apprenticeships. More agile use of training funds would enable manufacturers to quickly fill skills gaps in emerging areas like electrification or digital technology.
- Linking training funding to diversity progress: Noting the persistent underrepresentation of women in transport manufacturing, the Committee suggests using funding incentives to drive change. It advises the Government to consider making the release of levy funds contingent on an employer’s progress against its own diversity and inclusion targets. In practice, a company that fails to improve workforce diversity – for example, recruiting and promoting more women – could have additional public training funds withheld. This bold idea aligns with the national goal of reaching 35% female participation in advanced manufacturing by 2035 (up from roughly 20% today). Tying funding to equity outcomes would push employers to create more inclusive workplaces and tap into a wider talent pool.
Together, these recommendations sketch a strategic blueprint for building a future-fit transport manufacturing workforce. They emphasize collaboration – between government departments, industry bodies like Skills England, and employers – to modernize training and make careers in manufacturing more attractive and accessible.
Implications for Rail Employers, Suppliers, and Policymakers
For the rail sector in particular, the Committee’s proposals carry significant implications. Rail manufacturers and their supply chains are already grappling with an aging workforce and a shortage of critical skills (such as electrical engineers for electrification projects and digital specialists for next-generation signaling systems). If adopted, the recommendations could provide much-needed relief and opportunity:
Rail Employers: Train manufacturers and engineering firms would benefit from a stronger skills pipeline and more adaptable workforce. A DfT-led vocational training review could spotlight rail-specific needs – for instance, expertise in battery-electric or hydrogen train technology – ensuring colleges and apprenticeships produce graduates with those competencies. A competency passport system would make it simpler to recruit experienced workers from other industries (like automotive EV experts or aerospace systems engineers) into rail, bringing fresh skills to rail projects such as high-speed rail construction or rolling stock upgrades. Reinstating funding for higher apprenticeships means rail companies could upskill their mid-career technicians to advanced engineers, without age restrictions, filling higher-level roles that are currently hard to hire for. Moreover, greater levy flexibility might let large rail organizations channel funds to upskill smaller subcontractors in specialist areas (e.g. fibre-optic installation, CAD design, or carbon-fiber fabrication for train components), boosting the resilience of the whole supply chain.
Suppliers and SMEs: Smaller rail suppliers often struggle to attract talent and invest in training due to limited resources. The proposed reforms would encourage larger firms and government to support these SMEs. With more flexible levy rules, big contractors could share unused levy funds with smaller partners or fund short courses tailored to the supply chain’s needs. A competency passport would also assist SMEs by validating workers’ skills acquired at larger companies, making it easier for a technician laid off in one part of the industry to be hired elsewhere without redundant retraining. Overall, the recommendations push towards a more mobile and continuously developing workforce, which would help rail suppliers keep pace with technological advances and fluctuating project demands.
Policymakers and Industry Leaders: The rail sector’s policymakers – from the Department for Transport to regional transport authorities – would play a key role in implementing these ideas. A dedicated effort to gather industry feedback on training could illuminate mismatches between what rail employers need and what the education system delivers, enabling targeted policy fixes (such as new qualifications in rail digital systems or updated apprenticeship standards for rolling stock engineering). Linking funding to diversity goals would also compel rail sector leaders to prioritize inclusion. Rail has historically been male-dominated; meeting diversity targets will likely require concerted outreach, partnerships with schools and communities, and supportive measures like flexible working and return-to-work programs for mid-career women. While challenging, these efforts can yield a larger, more diverse talent pool for rail – essential as the industry competes with tech firms and other sectors for bright young engineers.
Looking ahead, the Transport Committee’s “Engine for Growth” vision underscores that tackling the skills issue is vital for rail’s future. Major rail initiatives on the horizon – from high-speed rail projects to widespread electrification and digital modernization of the network – will only be delivered on time and on budget if a skilled workforce is in place. By embracing the recommended policies, the rail industry and government can help ensure that Britain has the right people with the right skills to build world-class transport systems in the decades to come. In the words of Committee Chair Ruth Cadbury MP, it is time to “seize the new opportunities out there, especially in growth areas such as electric vehicles and alternative fuels,” and not let our transport manufacturing sector stand still while other nations race ahead. With strategic action now on skills, UK rail and transport manufacturing can confidently power forward into a greener, more innovative future.
