Gown and out: are British universities broke?

0:00With no fees or minimums on checking accounts, it's no wonder the Capital One Bank Guy is so passionate about banking with Capital One. If he were here, he wouldn't just tell you about no fees or minimums. He'd also talk about how most Capital One cafes are open seven days a week to assist with your banking needs. Yep, even on weekends, it's pretty much all he talks about. In a good way. What's in your wallet? Terms apply. See CapitalOne.com slash bank. Capital One N.A. Member FDIC. The more you listen to your kids, the closer you'll be. So we asked kids, what do you want your parents to hear?

0:38I feel sometimes that I'm not listened to. I would just want you to listen to me more often and evaluate situations with me and lead me towards success. Listening is a form of love. Find resources to help you support your kids and their emotional well-being at SoundItOutTogether.org. That's SoundItOutTogether.org. Brought to you by the Ad Council and Pivotal.

1:05The Economist

1:12Hello and welcome to The Intelligence from The Economist. I'm Jason Palmer. And I'm Rosie Bloor. Every weekday we provide a fresh perspective on the events shaping your world.

1:27China's officials rarely encourage local and regional rivalries. But a wildly popular new amateur football league seems to have the party's blessing, possibly because it's bringing some much-needed economic activity. And Superman has been standing up for truth, justice and the American way for almost nine decades. With a rebooted film out, our correspondent asks what the Caped Wonders crime-fighting tells us about US foreign policy.

2:05But first...

2:13Britain's universities are more broke than a student who's just spent the summer inter-railing around Europe. Mark Johnson is a senior editor at The Economist. The regulator reckons that four in ten universities are running deficits this year and universities are making big cuts to make their budgets work. Mark, we're always being told how brilliant British universities are. Why are they in such financial trouble? Well, the main thing they've been struggling with is the tuition fee that is paid by domestic students, by British students, has been frozen for close to a decade, a little bit longer than that.

2:50So it's been eaten away by inflation. So in short, their incomes have been falling just as their costs have been rising. Now, for years, they were able to adjust by accepting many more foreign students. But lately, the government has decided it has reached its limit on how many foreigners it wants to come into the country. It's been putting the brakes on that. So that source of income is no longer quite as easily available as it was before. Put those two things together and universities are finding that the budgets they'd planned no longer match the income that's coming in. So what are universities doing to cut costs?

3:31Largely, they've been cutting staff and courses, reducing options for students. So a poll of 60 institutions by Universities UK reckons that half of universities have closed courses in the last three years to save money. There's lots of cost cutting going on right now in terms of staff reductions. Durham has cut about 200 staff. Newcastle has cut a similar number. There's a new cost cutting plan at Lancaster University that unions say could see close to one in five academics lose their jobs. So what are politicians doing about all this? Labour has agreed to permit the cap on tuition fees to rise somewhat this year for the first time in eight years.

4:14So that is providing a small extra bump in income. It's not, though, said that it will continue to increase those fees with inflation going forward. So it's possible that this is just a one-off that actually changes nothing for universities in the long term. I think the sense is that the government is unlikely to want a sizable university to go under. so there is a sense that it would probably find the cash needed to keep one running if they ever got that close to the edge indeed in scotland dundee university has already received what looks like a bailout fund from the scottish government so this process is already in train but i think what universities really would like is for government to increase their incomes back to the levels they were at before inflation started eating away at these fees.

5:12And there's no indication at all that that's what Labour has in mind. You mentioned that fees are going to be allowed to rise now, which will be a bit of a short term fix. But what are the long term structural problems behind the current financial crisis universities find themselves in? Well, one of the reasons why fees have stayed frozen for such a long time is that they are actually quite high by global comparison. So every student at almost every university in the UK pays around£9 ,000 a year. That's about US$12 ,000 for a year's tuition. That's actually the highest fee in the world for any public university system.

5:57It's a bit less than you might pay to go to a private university in America, but it's more than the majority of students who go to public universities pay there. For years, that was softened with generous repayment scheme that actually forgave quite a lot of that debt that was taken out to pay for those fees. But actually, in recent years, the government's made the repayment system a bit less generous. So, in fact, many students are going to be paying their fees off into their 60s. That really makes this quite a tough debate for politicians to touch and explains why they've really done nothing about it and permitted fees to sink gradually.

6:35But I think all of this needs to be dealt with. Government needs to come up with a long-term vision for how to solve this so we don't end up in a similar situation a few years down the line. Lots of people believe that universities are far too spendthrift, that they've got bloated administrations, that they pay their vice chancellors too much, that they spend a lot of money building huge glossy campuses that don't actually improve research or learning. In the 10 years leading up to the pandemic, the number of managers in Britain's universities increased by about 60%. Universities say that students in Britain and their parents have very high expectations of what they should get.

7:19So Britain students are much more likely to live away from home than those in other countries. In Britain, only about 20 % of students live with their parents. In Italy, it's something like 70%. In Spain, it's 50%. So living away from home is much more normal in Britain. And that puts up costs. It means that universities need big mental health teams and unions and dormitories and things that other cheaper systems don't have. And British universities also tend to have quite a lot of academics, given the number of students they have, certainly if you compare to universities in places like France or Germany.

7:56And that also adds costs. So what would make it possible for universities to downsize gracefully then? I think there are things the governments could do to change the expectations in British higher education. Compared to other systems, Britain has a huge number of students doing full-time intensive three-year bachelor degrees. In places like Germany, far more students are doing one or two-year courses. In America, something like a third of higher education students are in community colleges where they're studying towards two-year degrees that are useful in the labour market, in which you can also kind of trade up to full degrees later if you choose.

8:38None of that really exists in Britain to any great extent. And there are things like the loan system kind of encourages you to do full long-term bachelor's degrees. It's quite hard to get loans to do pithy, shorter courses. Things like that the government need to address if it wants to see a sort of lighter touch, more efficient, more effective kind of university sector. There are people who would go much further. There is an argument that the British higher education system is very homogenous, that there's lots of overlap, that every university wants to do everything. They all want to invest in research.

9:17They all want to move up the league tables, which is what good research allows you to do. They all want heaps of international students and that actually this isn't producing good value. So there are some people who would see walls thrown up that set different missions for different universities that allow the best research universities to chase global rankings, but maybe encourage middling universities to have more local regional focus, to have more sensible ambitions and to pour much more of their income into teaching students. All this is up for discussion if Labour decides it wants to take these kinds of reforms seriously.

9:59Mark, thank you very much for talking to me. Thank you.

10:05And while we're on the subject of learning, I wanted to tell you that Economist Education, a separate part of The Economist Group, is offering listeners of the intelligence 15 % off our next business writing and storytelling course, which starts on July the 23rd. Produced by Economist journalists, you can learn to write with the same clarity and eloquence as my esteemed colleagues by visiting economist.com slash writing course and using the code intelligence. The link is in the show notes.

10:47so i went to the city of sujo knowing that i probably wouldn't be able to get into this football match don wineland is the economist's china business and finance editor my hope was I'd be able to find a tout selling a ticket, probably for a very high price, that would get me into this game between Suzhou and Yangzhou. These are two cities in the province of Jiangsu, which is very close to where I live in Shanghai. It ended up that I had to stand outside the whole time and watch the game on my phone on a live stream with hundreds of other people that were standing around. So we could hear the crowd cheering on the inside, but all we could do is really just watch on our phones.

11:35Keep in mind, this is an amateur football league. This is not a national level game. And yet it sold out a stadium of 43 ,000 people. I should say I'm not a huge football fan. In fact, I don't really know very much about football at all. I was there to see what the impact on the economy was like because these amateur football matches are really helping the provincial economy in Jiangsu province. So why was it so hard to get into that game? Why is it such a hot ticket? These provincial football matches that are happening in Jiangsu province are the new biggest internet phenomenon in China this year.

12:19So people are coming from across the country to watch these amateur league games. It's become an internet phenomenon, and it is taking over the Chinese internet, and it's taking over Chinese sports. The stadiums are filling up across Jiangsu. The one that I was at was a 43 ,000-seater. The one the next weekend was a 60 ,000-seater. So these are not small matches. These are massive, and they're really helping the economy as well. So beer sales are going through the roof. Hotel rentals are really picking up. And presumably incomes for ticket touts also on the up. This is the economic effect you were talking about before.

13:02Yes. So really everyone in the cities across Jiangsu is seeing a bit of a boost from this amateur football league. So this could not have come at a better time. Jiangsu province is really quite exposed to the trade war with America. In the city of Suzhou, some 9 % of Chinese exports to America came from that city alone last year. This is mainly electronics, manufacturing, and these are big cities. Suzhou's economy is bigger than the Czech Republic's. So when the manufacturing sector gets hit there, you see all sorts of problems. So youth unemployment is already rising in this area. And the local authorities are looking for a way to boost local sentiment and local spending.

13:51And to fire up local rivals to take each other on in local stadiums. That's correct. So one thing that's really worked well in Jiangsu is that its cities have had rivalries going back a thousand years. Just for an example, Suzhou and Yangzhou, the two cities that played each other at the game that I went to, So they've been competing for 1 ,000 years for economic dominance along the Grand Canal, which is this man-made canal in the area. Other cities also have big rivalries with each other. The city of Nanjing, which is the capital of the province, is detested by other cities in the area because of their dialect and because their culture is more associated with a nearby province.

14:35So there's all these tensions and local authorities are basically just kind of letting it rip and letting all these tensions out in the form of football matches. Which doesn't sound like the action of a party that's normally so dedicated to the idea of unity or projecting it anyway. Yeah, that's what makes this rather unique. So usually, whether it's between cities or provinces, the message is all about unity. But here, local authorities are actually promoting the idea of city rivalries, which is strange. I've never really seen anything quite like it before. Because presumably the economic benefits outweigh any dents to unity.

15:15But I guess the question is, how scalable is this? You mentioned it like it's an Internet phenomenon that might just be a fad rather than a, well, essentially a new economic plan. That's right. So a number of Internet trends have popped up in the past couple of years. They burn very bright and they burn out very, very fast. And some people think that this could also happen with the Jiangsu Football League. And at this point, we already see other provinces trying to replicate the success of this amateur league. So Henan province has launched a league already. It's not really doing that well from what we can tell.

15:51Guangdong and Sichuan have plans to do this. One thing that Jiangsu has going for it is, as I said, it's a rich province. It has great infrastructure. It has world-class stadiums in all of the 13 cities that are competing. So it's able to host these matches. In other places like Hanan, they just don't have the same infrastructure. So I'd be surprised if some of these other provinces succeed in launching amateur leagues. But at this point, it's really working in Jiangsu. And I got to say, it was a lot of fun and people seem to love it. Don, thanks very much for your time. Thanks, Jason.

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17:41You'd let me interview you as Superman. Sure. So in this scene between Superman, played by David Corenswett, and Lois Lane, played by Rachel Brosnahan, Superman and Lois Lane are sat in her living room. She's interviewing him about his latest intervention. Rachel Lloyd is the Economist's deputy culture editor. He's stopped one country, called Borabia, from invading another, called Jarenpul. and he feels like he's done a really good thing and he's saved lives. But not everyone agrees. Did you consult with the president? No. You seemingly acting as a representative of the United States I wasn't representing anybody except for me.

18:18And doing good. Lois is sceptical of unilateral action. Does Superman stop to think about the consequences of getting involved in other countries' conflicts? This scene and this plot got me to thinking about the history of the character. He's endured for almost nine decades because he's handsome, bland and adaptable. He's able to reflect whatever the American way means at any particular moment in time. Say kids, what is it up in the sky? Is it a bird? Is it a plane? No, it's Superman!

18:54Superman's stated aim is to defend truth, justice and the American way. And maybe sell some comics, toys and movie tickets along the way. But since his creation in 1938, Superman has had a serious calling. In fact, he's really a parable of how America feels about its role in the world. Having reached such a point in public acceptance, it is no wonder the comics have become a strong social force, an influence on our behaviour pattern that is bizarre, to say the least. Superman was originally created by Jerry Siegel, the son of Lithuanian Jewish immigrants. Initially, Superman's focus was domestic.

19:29In that first comic book, he saves an innocent woman from going to the electric chair. But the Second World War sort of complicated things. Jerry Siegel and the illustrator Joe Shuster face a dilemma when America entered the battlefield. Uncle Sam moves ahead. Here the First Division rolls into New York. The character's sense of justice would undoubtedly have led him to intervene on the Allies' side. This outfit has been dubbed the Superman by their buddies. But even the fearsome Lefraffer would have been no match for the Caped Wonder. Siegel and Schuster worried that soldiers would be dispirited by tales of Superman's easy victories.

20:04Some 80 % of the American army's reading material was comics, with Superman atop the charts. And if anyone gets this outfit now, they'd better watch out for Superman.

20:17Later, Superman grappled with whether he should interfere in earthly affairs. In Superman 2, directed by Richard Lester and released in 1980, Superman forsakes his powers in order to live a normal life with Lewis. This leaves America and the world vulnerable to the expansionist ambitions of General Zod. General, haven't you ever heard of freedom of the press? Superman! Superman, thank God. It's not hard to pass the message of this Cold War era story. Naturally, the film ends with Superman recovering his strength, returning to his duty as global protector and reinstating the American flag above the White House.

20:56Good afternoon, Mr. President. Sorry I've been away so long. I won't let you down again. The comics and films of the late 20th and early 21st centuries depict Superman as quite nervous about overstepping, particularly when it comes to foreign intervention and questions of sovereignty. So he aims to achieve as much as possible with as little force as possible. He uses surgical strikes, for instance, to eliminate terrorist cells. And this mirrors America's policy since 2002 of killing individual foes with missiles fired from drones. They've always been wrong about me. I love, I get scared, but that is being human.

21:43This new Superman film has been written and directed by James Gunn and is released by Warner Brothers. and it has the usual hokey dialogue and planetary peril that you'd expect from a superhero film. But early on it becomes clear that the conflict that Superman has rushed into is a set-up and this is more or less how some of Donald Trump's foreign policy team feel about skirmishes elsewhere, that America loses by getting involved. It may seem odd for a man who can do anything to contemplate doing nothing, but it makes for a timely film.

22:24that's all for this episode of the intelligence we'll see you back here tomorrow

23:14Thank you. The more you listen to your kids, the closer you'll be. So we asked kids, what do you want your parents to hear? I feel sometimes that I'm not listened to. I would just want you to listen to me more often and evaluate situations with me and lead me towards success. Listening is a form of love. Find resources to help you support your kids and their emotional well-being at SoundItOutTogether.org. That's SoundItOutTogether.org. Brought to you by the Ad Council and Pivotal.