The harsh reality facing schools is that all public-sector funding will continue to decline. The amount of resources devoted to education in Britain is relatively low compared to that spent by other Organisation for Economic Co-operation and Development countries, but this dismal truth hides a much more worrying long-term trend. Internationally, there seems to be an ever widening gap between the cost of running schools - or hospitals, fire stations, police stations and other public organisations - and the funding available from governments.

In Britain, the difficulty is compounded because it isn’t just a question of funding new initiatives, but of paying for those already started over the past few years.

Rising expectations inevitably mean that running schools will become more costly. The recent report from the Office for Standards in Education on our school glibly stated that, in order to meet government guidelines on the teaching of information technology, we should provide a much better ratio of modern computers. In a school which has worked ceaselessly to raise extra money for hardware, comment such as this sticks in the craw.

It comes as no surprise to learn that we are not alone in this. Visit most schools and discussion will inevitably turn to poor buildings, teacher redundancies, lack of books or obsolete computers. Alan Smithers, writing in this newspaper two months ago, confirmed that 90 per cent of schools say they receive insufficient cash to teach the national curriculum in technology.

Everyone hopes that governments will see sense and fund education properly, but until that day, what can hard-pressed schools do to ensure that pupils’ life chances are not irretrievably harmed?

What is probably needed is a more radical approach in the structure of organisations, changes to the way teachers’ pay is calculated and an acceptance of a more commercial “self-help” approach to fund-raising.

Eight years ago at Garibaldi school, we realised that massive and continous change was already under way and that the rate of that change would increase rather than decrease. Our traditional hierarchy of three deputies, senior teachers and heads of faculty was both expensive and slow and did not fully use the talent and expertise of all staff.

Layers of management were subsequently removed, access given to all information, people empowered to make decisions and mistakes and a risk-taking culture encouraged. Sustained inertia was seen as the only crime.

Some of the money released from this re-structuring was used to fund specific projects and staff were rewarded for leading these initiatives. Clearly the main reason for this was to establish a quick- response, entreprenuerial culture that motivates and excites people and that makes use of all of the talent and skill in the organisation.

Reducing overall staffing costs has been an added bonus. But it is questionable how much longer schools can continue to operate with massive hierarchies. Put blunty, I regularly come across schools whose average staffing costs are Pounds 7,000 or Pounds 8,000 per teacher, per year, more than this one. Upward salary drift of course has a crucial bearing on staffing costs and one wonders how much longer the present annual increments, rewarding time in the job rather than actual performance of it, can prevail. Perhaps spot salaries with additional remuneration for specific projects has to be the way for the future.

And what about national pay agreements? Health authorities have repeatedly demonstrated the tensions surrounding such settlements that do not take into account the ability of the employer to pay. At the moment we are just managing these tensions in education, but for how much longer?

In order to sustain development and to keep equipment levels up to date, many schools will have to move more into the financial “self-help” world. It will be more commercial, will entail new skills, new flexibilities and will be ever more demanding. It will not be about taking the high moral ground and begging for funding; it will not be about trying to find a fairy godmother. But it will be about thinking up imaginative schemes with companies that bring mutually benefit and generate new profit.

It may seem a gloomy picture with thousands of schools, charities and other public-sector organisations competing for scare resources but what is the alternative?

* Bob Salisbury is headteacher of Garibaldi School, Mansfield, Nottinghamshire.