The General Medical Council has issued a call for an increase in community-based medical education, and many medical schools are enhancing the community component of their curricula. This paper uses the experience of a community-based junior medical firm to explore the potential costs, and highlight some of the unresolved problems, which a major transfer of education to the community might engender. Community-based medical education is not a cheap option. The cost of this programme for the academic year 1992-93 was 266,494 pounds, or 60 pounds per student session. This compares with the Service Increment for Teaching and Research (SIFTR) provision of 41,140 pounds per student per annum, or (excluding the 25% of SIFTR which is supposed to cover research costs), 64 pounds per student session. There are a number of possible ways of funding community-based education, including a diversion of SIFTR toward departments of primary health care. As this would have serious implications for the financial viability of some medical schools, an urgent discussion about the future funding of medical education is required.