"Institutional racism" persists in UK universities and tackling the issue is seen as a lower priority than gender equality, a new report suggests.

It argues that race has often been seen as a "secondary priority", and that more work is needed to address the issue.

Making university research funding conditional on an institution signing up to the Race Equality Charter would be one way of changing attitudes, it suggests.

The document, published by the Higher Education Policy Institute (HEPI), is a collection of essays looking at ideas for reducing racial inequality in higher education.

In one chapter, Kalwant Bhopal, professor of education and social justice at Birmingham University, argues that "current scholarship on race in UK higher education consistently highlights the pervasiveness of institutional racism, which persists despite the presence of equality and diversity policies and the 2010 Equalities Act".

"Institutional racism works in overt and covert ways. In its covert form, racism is felt in black and minority ethnic (BME) staff exclusion from decision-making practices and cultural insensitivity, and in the performance and reproduction of the university as an elite white space at all levels of the institution," Prof Bhopal says.

"The result and effects of institutional racism can be seen in the significant under-representation of BME staff in UK higher education institutions, and particularly at senior levels in both academic and professional and support services.

"In terms of career progression in academic or professional and support services in higher education institutions, research has found racist practices in recruitment, promotions and pay.

"In addition to these measurable inequalities, the daily experience of racial marginalisation and exclusion remains deeply ingrained in the cultures of higher education institutions, and is a significant and normalised aspect of institutional life for many BME employees."

She goes on to say: "The insidiousness of racist practices across the higher education sector has proved difficult to challenge through equality and diversity policies."

The Race Equality Charter has the potential to address racism, Prof Bhopal argues, but more investment and incentive is needed for it to be effective.

She also says: "Work on gender is seen as worthwhile and contributing to an equalities agenda.

"Race, on the other hand, has always been seen as a secondary priority.

"If higher education is serious about social justice, then race equality must be seen as a priority - linking the Race Equality Charter to research funding would be a good start."

Other recommendations in the report include calling for funding for new PhD places for BME candidates and recognising and rewarding the informal work done by BME staff, such as mentoring BME students.

Hugo Dale-Rivas, HEPI policy officer, said: "Racial inequality is in danger of being an accepted fact in higher education. It is too easy for people to shrug and treat it like someone else's problem.

"The report shows many things we need to do. For instance, all universities - not just a third as now - should apply for awards with the Race Equality Charter.

"Change needs to come from all areas, from vice-chancellors and senior management but also from academic departments and to affect everything a university does, right down to the interactions between colleagues and the way we talk about race."

Chris Millward, director for fair access and participation at the Office for Students, said the ideas in the report should help to address "one of the major concerns for equality and fairness in higher education today".

"There is a need for straight conversations about the stubborn attainment gaps between some ethnic groups, which are holding some students back from achieving their full potential," he said.

"It is a great injustice that black students should be so much less likely than their white peers to complete their courses, gain the top marks and secure graduate employment."

Jo Grady, general secretary of the University and College Union (UCU) said: "This new report is a timely reminder that we still have a long way to go when it comes to achieving equality for BME staff and students in our universities."

By Alison Kershaw