The British Railways Modernisation Plan called for a large number of small diesel locos in the 800-1250 bhp range. In 1958 the Birmingham Railway Carriage & Wagon Company initially produced 20 locos with a Sulzer 6LDA28-A power unit of 1160 bhp, which were delivered to Horsey depot on the Eastern Region. A further 27 production locos were built for the Scottish Region. By the middle of 1960 all the class 26s had moved up to Scotland.

D5338 entered service at Haymarket depot on 28th August 1959. In February 1960 she moved to Inverness depot. From 1986 to 1992 she spent time in the south of the country (Scotland, that is) firstly back at Haymarket, then at Eastfield, before returning to Inverness for the last 2 months of her BR career. Thus 26038 spent 26 years 8 months as an Inverness-based loco, the longest association of any of the Teacups (as class 26s were known to the Scottish enthusiasts).

It is believed to have been the last class 26 with an operational steam-heat boiler on BR and the last one to work on the far North line from Wick, when it piloted 37263 (sadly not 37264!) on 9th November 1985.

26038 was withdrawn in October 1992, following a traction motor defect, but was bought by career railwayman Tom Clift and, initially, stored at the South Yorkshire Railway in 1994, before moving to Cardiff Cathays.

Tom was able to see the loco running once again before, sadly, passing away in 2012. As a mark of respect, the current owners of 26038 named the loco after him at a ceremony at the Keighley & Worth Valley Railway’s diesel gala in 2013.