Evaluating the Scalability and Feasibility of the Manchester Model

In a period defined by stagnant productivity across the United Kingdom — labour productivity growth slowed from an annual average of 1.9–2.1% in the decade before the 2008 financial crisis to roughly 0.4–0.6% thereafter (Martin et al., 2025) — and by the long-term decline of deregulated of local bus networks, which saw journeys outside London fall by 35-50% since 1986 (Alan Howes Associates, 2011), Andy Burnham’s “Manchester Model” has emerged as an alternative to centralized Whitehall governance. Frequently termed “business-friendly socialism”, it leverages authority to intervene in local markets and stimulate growth. To evaluate the effectiveness of his policies and their scalability for nationwide replication, this essay focuses on the Bee Network and the Greater Manchester Baccalaureate (MBacc). This selection is justified because they both aim to tackle structural challenges: underinvestment in

physical infrastructure and human capital. Ultimately, this essay argues that while these policies have achieved success, a nationwide replication remains contingent on fiscal capacity, and the ability of other regions to tailor the models to their own economic landscape.

Following the deregulation of Greater Manchester’s bus network in 1986, the local state relinquished control over its surface transit network. Private operators took over, and Greater Manchester saw a race to the bottom. The fundamental driver of this decline was the adversarial nature of the system: 830 services run by 30 separate operators using 150 ticket types, which imposed substantial transaction costs and

asymmetric information on consumers (Cox, 2021). This created two distinct problems: rising fares driven by localized monopolies, and under-provision of public transport as a merit good. This perpetual allocative inefficiency caused commuter numbers to drop by over 40% across three decades (Centre for Cities, 2016).

Public transport networks exhibit the characteristics of a natural monopoly – where immense fixed costs and economies of scale mean that a single supplier can operate at a lower average cost than multiple competing firms. However, under deregulation, the market quickly consolidated into private monopolies. In the absence of price regulation, profit-maximizing firms restricted output to the point at which marginal revenue equaled marginal cost and charged supernormal prices — bus fares in Great Britain rose by around 60% in real terms between 1985 and 2010 (Alan Howes Associates, 2011). This resulted in deadweight loss – a loss of societal welfare — as illustrated in Figure 1.

The second issue stems from the private sector’s neglect of positive externalities. Operators planned routes solely according to private costs and benefits, raised prices, and cut vital suburban and off-peak routes — bus vehicle mileage in England outside London fell by 13.8% after 2004/05 (Department for Transport, 2019), driven mainly by a collapse in supported suburban and off-peak mileage, and annual bus journeys in Greater Manchester fell from around 355 million in 1986/87 to 182 million by the end of the 2010s (Parliament.uk, 2023). Private operators therefore ignored the wider external benefits (EB) that affordable transit yields to society, resulting in underprovision and market failure (Figure 2).

To combat this dual failure, the Bee Network was unveiled in 2018 and achieved full regional bus franchising by January 2025 under Burnham. Franchising restores public control over the transit system by allowing the authority to design the network and set fares, while contracting private operators to run the services under set performance standards rather than allowing dominant firms to exercise market power on profitable routes.

The Bee Network reduces both forms of market failure. First, by shifting control to the public authority, output expands beyond the restricted monopoly quantity towards a more socially efficient level, shrinking the deadweight loss. Simultaneously, by planning service levels with reference to social benefits, the Bee Network captures the external benefits of public transport through shifting provision from the private optimum (Qm1) closer to the social optimum (Qopt) level (Fig.3). Together, these changes improve efficiency in the market for public transport, mitigating the market failure that characterized the deregulated era.

By replacing an uncoordinated pricing system with a flat-rate fare cap of £2, the Bee Network reduced the average cost of travel for bus users by almost 20%, with savings of up to 50% on previously expensive routes (Transport for Greater Manchester, 2023). Cheaper and simpler fares lowered the private cost of

using public transport, encouraging greater patronage and thereby capturing more of the positive externalities associated with bus use, such as reduced congestion and improved access to work. Furthermore, by expanding reliable and affordable transport routes between outer boroughs and employment centres, the Bee Network has enhanced labour mobility, enabling residents to access a wider range of job opportunities without being constrained by high costs or uncoordinated ticketing.

The potential for nationwide replication is strong in regions that still operate under deregulated systems and continue to experience poor integration. Greater Manchester has demonstrated that franchising can reverse long-term decline: bus journeys rose 14% year-on-year in the first franchising areas (Parliament.uk, 2023), and the £2 fare cap reduced the average cost of travel by around 20% (Transport for Greater Manchester, 2023). Where local authorities possess the powers and political determination to take control and improve public transit, the Bee Network offers a viable route to improvement.

However, it is important to note that the reported 14% year-on-year ridership increase in early franchised areas cannot be attributed solely to reorganization; it was also driven by the state subsidized £2 fare cap. Additionally, transition costs alone reached an estimated £134.5 million (Manchester Evening News, 2026), and the model shifts all commercial revenue risk onto the public budget. If fare revenues underperform, local taxpayers must underwrite the deficit, which could potentially strain budgets,

particularly for authorities with weaker fiscal capacity. Despite this, replication of the Bee Network system remains a priority investment for regions with sufficient resources, because continued deregulation has already imposed far higher long-term economic and social costs and persistent market failure. The wider returns in higher ridership, lower fares, improved access to transit, and stronger labour mobility

therefore justify the high initial cost and risk.

Moving on, the Greater Manchester Baccalaureate (MBacc) is among Andy Burnham's most notable education-to-employment initiatives. It is a technical route that deliberately connects the curricula of schools and colleges with the skills needed by Greater Manchester’s major growth sectors, namely digital technology, advanced manufacturing, health and social care, and the green economy (Greater Manchester

Combined Authority, 2022).

The case for replicating this model nationally rests on two practical strengths. First, it reduces the number of young people not in education, employment or training. By providing a programme linking classroom and workplace, the framework gives

students an explicit route into skilled work. Its effectiveness is evident – in its second year, the MBacc had already involved more than 21,000 young people through careers activities and secured workplace experiences for 1,405 students, alongside 1,163 T Level placements with 439 employers (Greater Manchester Combined Authority, 2026). Secondly, the MBacc tackles the issue of structural unemployment: a mismatch between skills young people obtain and skills demanded by employers. By

aligning curricula and work placements with the needs of regional growth sectors, it helps close persistent skills gaps that give rise to issues including higher natural unemployment, government budget strains, lower potential output, and long-term

individual hardship. From the macroeconomic perspective, this expands the economy’s productive capacity through improving a key input – labour. In turn, the long-run aggregate supply shifts outwards, from LRAS1 to LRAS 2, reducing the average price level from PL1 to PL2, and raising the full-employment output from Yf1 to Yf2 (Fig.4.). The benefits therefore extend beyond individual students to the local economy as a whole, raising potential output and improving competitiveness whilst

supporting higher employment.

Although this scheme is advantageous for a number of different stakeholders in society, it should only be copied in areas where there is strong involvement by local employers and continuous coordination between schools, colleges and businesses, given the success of the scheme is dependent on these elements. In Greater Manchester, the model has so far reached around 40% of schools and colleges Greater Manchester Combined Authority, 2026), and its early results are heavily attributed towards active partnerships that cannot be assumed to exist elsewhere. A uniform approach could fail in regions whose industrial requirements differ from those of Greater Manchester. Because of the potential benefits to society as a whole, the principles of the MBacc should be adopted more widely, but in order to maximize effectiveness, regions must create their own versions tailored to their specific circumstances rather than replicate a national model.

In conclusion, the Bee Network and the MBacc demonstrate that intervention can support development in both transport and human capital. Franchising has reduced fares and captured positive externalities, while the MBacc aligns technical education with regional labour demand. Both, however, depend on significant public expenditure and institutional capacity. Nationwide replication is therefore conditional: it is warranted where fiscal resources are sufficient, and where the models can be adapted to local industrial structure rather than imposed uniformly.