I've just caught up with this thread. *Cringe*. Most Mancunians aren't bonkers like the OP. Manchester simply does not need an underground.
That said, there is still a lot to be done in order to get Manchester's transport network to a satisfactory state.
The bus network must be the priority. It is the mode used by the majority of public transport users, but is still disjointed and inefficient, reliant on aging, dirty and polluting vehicles. Investment in new vehicles is continually underway, but often slow and confined to limited routes. It is clear from the London experience that a unified, mono-branded system operated management contracts and concessions ala TfL Buses would be ideal.
The Metrolink network is increasingly successful, and I think it is only a few lines from being foundationally "complete" - Trafford Park, Stockport, and central and north Salford are the obvious gaps for rail coverage of key conurbation centres, with TfGM known to be working on proposals for the first two. That is not to say additional lines would not be very desireable, just that we will soon approach the point where additional lines are probably no longer "emergency" urgent priorities for TfGM.
Cross-modal integration is also very lacking. The region would benefit from a reformed ticket system, particularly with regards to the buses where prices vary across operators and routes. Integrated ticketing, unified zonal fares, enhanced cross-modal interchange facilities and smartcard ticketing should be key focuses for TfGM.
An underground railway would be an expansive sham waste of money, a shiny glamour project achieving little for ordinary people. The real work lies in addressing bread and butter issues like ticketing and buses.
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I agree that investment in this country is far too London-centric. But this is not a DfT fault as much as it is a national flaw. Enabling our core cities to compete and drive national growth effectively should be a political priority. Taking money from London and pumping it into regional vanity projects would not be sustainable (though perhaps it is true that this constant cycle of investment in London is a catalyst to potential regional capital flight and brain drain); political and economic reforms are needed to facilitate self-sustaining regions. I happen to see investment in northern infrastructure (ie. transport) as key to this process.
In this, Manchester has done actually rather well, especially so given the limited political power at its disposal (though transport investment per capita, compared to London, is actually still very low). Other core cities have fared much worse, particularly Leeds, Liverpool, and Birmingham.