The Spending Review announced by the Coalition Government in 2010 represents a challenge to those who lead a variety of state-sponsored institutions, not least in post-compulsory education. For General Further Education Colleges (GFECs) who are confronted with a reduction in funding for a wide variety of programmes, and Sixth Form Colleges (SFCs) who have had their funding for tutorial provision and enrichment curtailed, the Spending Review heralded a major financial challenge. How principals respond to this challenge, together with the long term drift towards the marketisation of education, is reflected in their values and priorities. This investigation set out to explore how teachers in a variety of SFCs and GFECs viewed the response and leadership style of their principal. The findings suggest that principals are primarily driven by institutional interests. Although colleges may claim to contribute to the economic and social regeneration of their local community, social democratic values are likely to be subordinated to neo-liberal exigencies in the current financial and ideological climate. (Contains 1 figure and 3 tables.)