Northern lights: How Manchester plans to prevent its top graduates heading south

The city of Manchester, thought by many to be Britain's second city, is to tackle a brain drain of creative people to London with a new incentive scheme for graduates of its universities.

Students taking degrees this summer from Manchester, Manchester Metropolitan and Salford universities will have the chance to apply for the Manchester Masters scheme that aims to keep graduates in the North-west for at least a year after they leave university.

Sponsored by organisations from the public and private sectors, including the National Endowment for Science, Technology and the Arts (Nesta), the programme will focus on the creative sector, covering advertising, marketing and new media.

The lucky 10 students who make it through what promises to be a "boot camp" selection weekend – with Dragon's Den-style grillings – will benefit from three work experience placements, a salary of £10,000 and a rent-free city centre apartment for the year.

At the end of the programme, they will receive a Masters degree – most likely in business practice or professional practice – from Manchester Met. The degree is yet to be officially accredited, but those behind the scheme are confident that it will be.

"It will definitely happen – we know that for a fact," says Sandy Lindsay, managing director of the marketing firm Tangerine PR, who came up with the idea for the Masters degree in a brainstorming session with business and council leaders locally.

"We wanted to think of ideas to make Manchester a more innovative city," she says. "The constant theme was talent retention: How do we keep the best minds? How do we get the best minds coming to Manchester?"

The latest research conducted as part of the Manchester Independent Economic Review reveals that the city has particular difficulty keeping hold of the graduates of its universities, though it fares better than other English cities outside the capital, and is particularly successful in attracting the graduates of other northern universities.

But there has been concern for some time that the brightest minds coming out of the top universities in the North of England - Manchester, Leeds and Sheffield - feel that they need to go to London to get ahead. For years the capital has acted like a magnet for graduates across Britain.

"When students graduate from places like Leeds and Manchester, especially in creative industries they seem to think they need to do their time in London," says Lindsay. "There seems to be this misconception that if you want to work with great brands you need to work in London or New York. That's simply not true."

It is hoped that the Manchester Masters programme will enable local businesses to tap the local graduate market before talent trickles south. "Why wouldn't they want to work for my agency?," asks Sue Benson, managing director of The Market, a Manchester-based creative consultancy, which is offering two placements for the scheme.

"The training and the calibre is as good, if not better, in the North and I think the pay would be better because of the standard of living up here".

Overall funding for the Masters scheme comes from the Manchester Innovation Fund, which is funded by Nesta, the Northwest Regional Development Agency and Manchester City Council. Businesses that take a student will pay £1,500 a quarter towards their salary. The remainder of the package is made up of freebies from the private sector: for instance, travelcards, rent-free accommodation and membership of the Chartered Institute of Marketing. It is hoped that these perks will lure the best young creatives to stay.

But others in the industry question whether this is the right way of going about retaining talent. "I look at this as a fantastic thing for someone to have on their CV and an opportunity for the winners to tout their CVs at the top agencies of the world - and these are primarily not Manchester-based," says Stuart Murphy, director of Thinktank Marketing, a Wigan-based agency whose client list includes T-Mobile, the BBC and Manchester United FC.

"I wouldn't say the 10 individuals are going to be in Manchester after a year, unless they are offered senior positions." He adds that while Manchester Masters sounds like a great scheme, there is something wrong with the idea that keeping just 10 individuals in the North-west will solve the brain-drain. "There's got to be another way," he says.

Murphy would rather see money invested in tailoring university courses better to industry: "Graduates are ill-equipped to deal with the commercial world or understand a commercial brief. They offer very little for the agency. There's far more we can do to make sure we recruit the right people and ensure the courses are at the right commercial level."

Danny Blackman, an award-winning web designer, is indicative of the Northern brain-drain. He graduated from Leeds University with a BA in communications and new media in 2007. Despite being offered a position with a Leeds agency, he took up a job with a creative agency in London.

"In London the size of the clients was going to be much bigger and much higher profile," he says. "The prospect of working on Honda and British Airways projects drew me there."

But he likes the idea of the Manchester Masters: "I think it probably would have [encouraged me to stay]. You're getting paid and getting a qualification, which is really good," he says.

'It's a great city'

Pete Madden, 24, is a final year business student at Manchester Metropolitan. He has applied for a Manchester Masters degree

"I love Manchester. It's a massive city with loads of culture and diversity and there are quite a few opportunities here. I have looked at going to London, and I love it as a city. But the living costs are astronomical – I've probably halved my living costs by being up here.

"At Manchester Met, there are a lot of entrepreneurs looking to start their own businesses or work for charities that aren't necessarily in London. I would say the majority are not looking at London, but if you go to Manchester University, I expect you might find differently.

"At the moment it's quite tough for graduates to get a job. I went to a careers fair the other day and it was pretty bleak. Students are maybe looking for a bit more security and – bearing in mind many at MMU are North-west based – thinking about staying at home.

"The consensus is that there are a lot of opportunities in Manchester and many aren't willing to give up their student life just yet, so a lot of people are keen to stay in Manchester.

"Obviously there are only going to be 10 people who get on the Manchester Masters scheme – ideally you'd want to get more people involved. I bet that all 10 who qualify will stay in the North-west. I could see myself staying in the North-west because of it." AS