Public and bank holiday, holiday entitlement?

Not necessarily. I means what it says that you are entitled to (will accrue or earn in a 12 month period) 26.5 days of holiday inclusive of any bank holiday entitlement in that year. Some people work the bank holidays (places like 24 hour Tescos for instance are always open / staffed on a bank holiday) and some people have them off (like er... bank workers for instance). The ones who work them still have the day in their holiday entitlement as a due day, the ones who have them off reduce their holiday due days by 1 to cover each bank holiday they have not worked.

Yes, it means you get public and bank holidays off, and then any additional days left of the 26.5 would be vacation or personal holiday time you can schedule. A day would be calculated as your normal number of work hours per day. If you really meant to ask if you get BACK holidays off, not BANK holidays, I assume you mean you started work after January 1st. Usually the first year's holidays are prorated based on the number of your actual work days the first year compared to a full year.