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There is certainly a legal duty with regard to the ballot and the shareholder vote, which was how things played out at Reidvale. However, the root cause of the problems was the notion that it was simply good practice to carry out tenant consultation prior to a formal options appraisal. From a reading of the regulations, though, it seems to me that that is a requirement, and if the process is not compliant, there is a “Do not pass go” mechanism. In any case, the regulator should certainly intervene at that point to say, “We don’t think that you’ve followed this procedure correctly. You shouldn’t be doing an options appraisal before you’ve done consultation with the tenants and the wider stakeholders in the community.” It was only when the options appraisal was published that Reidvale was told that it needed to do a transfer of engagements. That became the narrative from that point onwards, when everyone was caught unawares. Do you see what I mean?

I know that there has been talk of merger culture—I will not repeat that discussion—but, clearly, concerns arose during the process at Reidvale about statutory managers, who also regularly act as interim directors and transfer consultants. There seems to be a community or ecosystem of people who are associated with each other—who have those relationships.

There was concern that, if there is a merger culture, or an alleged merger culture, having someone who is a statutory manager one minute and a transfer consultant the next could lead to the reasonable conclusion that they are biased towards transfers as an appropriate measure, instead of towards working hard to protect the community control of the housing association. Does there perhaps need to be greater transparency about relationships, the register of interests and so on? Maybe that is something that could be improved in the statutory framework.

I apologise for my late arrival—I had to attend the Health, Social Care and Sport Committee prior to attending this meeting. I thank the gentlemen from the SHR for their attendance. I should also declare that I have recently become a member shareholder of Reidvale Housing Association in Glasgow.

Gentlemen, you will recall that, about this time last year, we were reflecting on the situation at Reidvale. Obviously, things have moved on since then. I would like to reflect on what has gone on there in the past 12 months or so. What lessons can be learned from the process?

If we look back, it seems that the root cause of some of the challenges at Reidvale was standard 7.3 of the Scottish Housing Regulator’s standards of governance and financial management, which states that a registered social landlord must ensure that there is “adequate consultation” before engaging in an options appraisal. However, that was not carried out at Reidvale Housing Association. That is quite a subtle emphasis. It was a fait accompli that transfer was the preferred outcome prior to the tenant consultation being carried out; it was presented as though there was no alternative.

Bearing in mind that concern, which was raised with the regulator at the time, and how things subsequently played out, do you have any reflection on the application of standard 7.3 and how it can be clarified to ensure that all the options are looked at fully, with consultation being carried out with tenants on what they want to do with their community-based housing association before the formal options appraisal is undertaken?

I very much appreciate that.

I appreciate that response. I have one more quick question. On the idea of peer support, and of housing associations co-operating to support each other, is there concern that giving RSLs a non-compliant status could lead to a chilling effect? A neighbouring housing association might want to support another association, but they might be non-compliant. Non-compliance is not the end of the world—it can often be quite benign issues that just need a bit of work—but it might create an idea that one housing association is tainted and cannot work with another one, or look to develop a relationship.

Similarly, I have heard reports from housing co-operatives that they are being pressured to demutualise because it is seen as inappropriate that the membership of the housing association is restricted just to tenants. That is not seen to be a good thing, and that people from outside the housing association should be brought in. However, the principle of co-operation and co-operatives is that it is the people who have a stake in them who are the members. Perhaps some of the practices of the regulator can militate against that idea of co-operation in building housing co-ops and collectives.

Could the cabinet secretary provide more detail on the changes that underpin the significant decline in the “miscellaneous other services and resource income” budget line?

That is helpful. Is it still the intention of the Government to increase direct investment in mental health services by 25 per cent over the course of this parliamentary session and to allocate 10 per cent of NHS front-line expenditure to mental health?

The cabinet secretary is right to point out a real crisis in mental health in the country, with the rise in general issues. He also pointed out that the Government’s stated objective was to increase the overall percentages of mental health investment, yet the 2025-26 budget shows a 1.1 per cent real-terms cut to the mental health services budget line. That comes back to the cash versus real-terms issue, as well as where you measure from—budget to budget or autumn review to budget. Certainly, when we look at the 2025-26 allocation compared with the 2024-25 budget—not the post-autumn budget review figures but from budget to budget—we see that the mental health services budget faces a cash cut of £20 million. How does it marry with the Government’s stated intention to grow the overall slice of the NHS budget pie that goes to mental health, when that is actually going backwards?

Where the Government has set clear missions—a 25 per cent increase in direct investment in mental health services and 10 per cent of NHS front-line expenditure being allocated to mental health—it would be really useful to know exactly where the Government is in meeting those targets.

I thank the cabinet secretary for his opening statement. Health and social care is a huge area of public expenditure for the Scottish Government. Next year, the overall health and social care budget is forecast to be 42 per cent of all Government revenue expenditure, which is a significant amount.

Understanding like-for-like comparators can be quite challenging; there are cash figures, real-terms figures and percentages. Our concern is that the change in baseline presentation in this year’s budget presents challenges when trying to do a meaningful interpretation of year-on-year changes to the health and social care budget.

We note that, from budget to budget, there is a real-terms increase of 3.4 per cent, but under the new presentation of autumn review to budget, it is 7.5 per cent, which is a clear difference. Do you accept that the previous budget-to-budget presentation was more meaningful, given the significant in-year transfers that take place each year from health to local government and, in the case of clinical training, to education?