This paper starts by summarising recent challenges to neo-liberal assumptions about human motivation, rooted in economically rational individualism. This leads into the discussion of the increasing recognition of the role of emotions and alternative approaches to social policy and community development, including increasing interest in faiths and spirituality within civil society as well as amongst public policy makers. Finally, the paper focuses upon the emotional impact of neo-liberal policies upon public service professionals, their motivations and professional identities, together with the ways in which they identify and cope with the ethical dilemmas that they face, in the current policy context. This final section draws upon the findings from research carried out together with Paul Hoggett and Chris Miller, along with some more personal reflections on the possible implications for training and continuing professional development.