LABOUR Britain is going to be a tough place for those who provide public services. In areas as diverse as utilities, universities and hospitals, the message to managers and practitioners is that they will have to deliver a better service but cannot expect much more public money than they had under the Tories.

In the case of universities, Sir Ron Dearing is expected to come up with a formula for fees that will mean new private money for the sector. In health, analogous options will be rightly resisted: being ill, unlike getting educated, does not make people richer. The National Health Service, free at the point of use, is the greatest achievement of the British welfare system. Voters would be unforgiving to any political party which dismantled it.

That does not, however, mean an end to change. It does not end the search for savings nor the repercussions for those bodies, like universities, which are intimately involved with the NHS. A fifth of university spending goes on medicine, dentistry and health, including professions allied to medicine, with 9 per cent on clinical medicine alone. Thanks to the transfer of nursing to universities, the growth of professions allied to medicine, and the development of postgraduate medical schools, new as well as old universities, are affected.

At this week's Edinburgh gathering of the British Medical Association, it was received wisdom that Dearing will suggest that medicine become a postgraduate-entry subject. This would have huge effects on the content, organisation and financing of medical training. Concentration of medical research into fewer, bigger centres, in line with the trend in other subjects, is also expected, as we report on page one.

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Delegates at Edinburgh pointed to one insidious effect which NHS finance problems are already having - whole categories of elective surgery are being abandoned at some big hospitals. This is bad for patients, it also means students gain no experience of these operations.

For the slightly longer term, the medical profession is warning of a shortage of teaching capacity, which it would like to solve by opening a new medical school. If Dearing proposes stepped fees based on teaching costs that will make medicine one of the most expensive subjects to study, some talented applicants may be deterred and demand could falter. But if money is found for a new school, there will be no shortage of universities wishing to host it.

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A new centre will need staff as well as money and students. The key medical role of the universities is to produce the next generation of doctors, dentists and other medical professionals. To do this, they must also produce medical academics. The Committee of Vice Chancellors and Principals reports this week (page three) that the long-standing setup whereby clinical academics do teaching, research and medical practice is in danger because of the pressures on both the clinical and the academic sides.

Research, the main attraction of academic medicine, is the main victim. Health trusts have been more aggressive than universities at staking claims to the time of clinical academics, so that patient care is taking precedence over research, while in university departments, research is being eroded by teaching loads.

Setting up new, workable understandings between health trusts and universities will be a severe test for British public service. Recent changes have destroyed the extraordinary cooperation that existed between medical schools and health authorities before lack of money and the urge for closer accounting upset the knock-for-knock system.

Unfortunately, it is unlikely that that enviable informality can be restored in the new system that ought to emerge in response to the CVCP's report. Criteria for the number of research, teaching and clinical hours individuals are expected to provide are likely to become more rigid. This is a pity, not least because rigidities are unhelpful when the time between discovery and new practices is getting shorter and research affects treatment more directly.

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Furthermore, much of the research that might lead to better patient care comes not from biomedical science, but from social studies of disease patterns and the relative success of different treatment regimes. Clinical academics need time and the company of academics in other disciplines if they are to participate in such research and absorb its findings.

Medical research in universities is not a poor relation. It has its own research council, plus generous research charities and the goodwill of the UK pharmaceutical industry, one of the success points of the British economy. Many talented people with a high sense of public duty want to be medical researchers. The challenge is to ensure that satisfying careers are available for them.