Research-intensive universities may consider ¡°radical options¡± such as going private if funding is not increased in the next few years, the director general of the Russell Group has warned.

Wendy Piatt told the Independent Review of Higher Education Funding and Student Finance that the group¡¯s members faced a ¡°bleak future¡± unless more money was pumped into the system.

Giving evidence today to the latest public hearing, held at the University of Leicester, Dr Piatt said Russell Group universities could soon find themselves unable to meet students¡¯ expectations because of the funding gap they faced.

Asked by Lord Browne of Madingley, who is chairing the review, what would happen if no changes were made to the current system, she said: ¡°We are perilously close to undermining student quality. We are not quite there yet because institutions are bending over backwards to protect quality.¡±

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The group warned in its first written submission to the review, which was made public last week, that it faces a funding gap of more than ?1 billion by 2012-13.

It would like more money to be raised by lifting the cap on tuition fees over time and by getting graduates to contribute more through higher loan interest rates and quicker repayments.

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During today¡¯s hearing, Dr Piatt said Russell Group universities were already struggling to compete with overseas institutions for the best postgraduates and could soon begin losing key academics.

If the status quo was maintained, she said, ¡°we would not be investing in our future, we would be facing a bleak future¡±.

Asked by Lord Browne if going private would ultimately be an option, she said: ¡°I think that would require a lot of consideration and we would hope not to have to go there, but we would certainly have to consider more radical options.¡±

Dr Piatt added that although Russell Group institutions currently had a ¡°commitment¡± to teaching a certain number of UK and other European Union students, they might have to re-evaluate the mix if funding dried up.

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¡°We would have to think about taking on more international students. If there are really no more sources of funding, then that might be an option,¡± she told the panel.

simon.baker@tsleducation.com