144.Sections 104 to 109make enabling provision for new ways of giving financial support for education and training. Overall the scheme is known and promoted as “Individual Learning Accounts”(ILAs). The Act however makes separate provision for ‘qualifying accounts’ (section 104) and ‘qualifying arrangements’ (section 105), and thus an ILA may either take the form of qualifying arrangements under section 105 or the form of a qualifying account under section 104. Provision for qualifying arrangements allows for the setting out of the conditions which have to be met for people to qualify for financial assistance. This forms the basis for the initial national implementation of ILAs from September 2000. A dedicated account, similar to a bank account, formed the basis of the proposals for ILAs set out in the Green paper, The Learning Age and the White Paper Learning to Succeed. However, extensive market research conducted as the policy was developed concluded that an administrative model was preferable for most people to a dedicated bank account model. Nevertheless, provision for ‘qualifying accounts’ allows for the option of developing a dedicated bank account model in the future.
145.A related measure providing tax relief for employees who are holders of ILAs is contained in section 200E to 200J of the Income and Corporation Taxes Act 1988 inserted by section 58 of the Finance Act 2000. The Finance Act ensures that employees are to be exempt from tax on any employer contributions made to learning activity by employees which is eligible for ILA incentives either on the basis that the employee is a party to qualifying arrangements or on the basis that the employee is the holder of a qualifying account.
146.Section 104gives details of the conditions to be specified by the Secretary of State in regulations which will have to be met for an account to be a qualifying account. These conditions may relate to:
	the name by which qualifying accounts may be known;
	the types of individuals who may hold an account;
	the institutions with which an account may be held;
	the type of account and how it is held (e.g. to exclude joint accounts);
	an individual not being allowed simultaneously to hold more than one qualifying account.
147.Regulations as to institutions with which an account can be held may themselves set out the description of institutions or may allow the Secretary of State to specify the institutions. Regulations may also require that institutions with which an account may be held be approved by the Secretary of State.
148.Section 104 extends to England, Wales, Scotland and Northern Ireland because it is concerned with financial services which are reserved matters under the devolution settlements (see section 155(1)). Section 104 also makes provision for its regulation-making powers to be exercised directly by the Scottish Ministers for learning accounts in respect of Scotland. The Government intends the Scottish Ministers to have these powers as they will be responsible for all other ILA legislation. Making provision directly in this Act accelerates a process which would in normal circumstances (via an executive devolution order under section 63 of the Scotland Act 1998) take at least six months. This will allow ILAs to be made available to the same timetable across the UK.
149.Section 105 provides for qualifying arrangements which will allow individuals simply to register with a central provider in order to qualify for financial assistance. Under this model, ILAs will be similar to a membership scheme offering account holders access to discounts on learning and information on the different courses available. By registering with the central provider, an individual will be able to claim these benefits. In this way, it is up to individuals themselves how they pay for their element of the cost of learning.
150.The section gives details of the conditions to be specified by the Secretary of State (in regulations) which will have to be met for arrangements to qualify. These conditions may relate to:
	the types of individual who may enter into qualifying arrangements;
	the bodies with which arrangements can be made;
	the nature of the arrangements;
	arrangements to ensure that people are not simultaneously party to qualifying arrangements in more than one part of the UK. This will help control the distribution of the incentives linked to ILAs.
151.The section also allows the regulations themselves to describe the bodies with which qualifying arrangements can be made, or for the Secretary of State to specify the bodies. Regulations may also require that bodies with which a person can be a party to qualifying arrangements are approved by the Secretary of State.
152.Section 105 covers England and Wales only. Scottish Ministers have prepared their own legislation (the Education and Training (Scotland) Act 2000) for all elements of the ILA provisions, except section 104.
153.Section 106 secures provision for qualifying arrangements in respect of ILAs for Northern Ireland. Under the devolution settlement, the Northern Ireland Assembly would normally prepare its own legislation for qualifying arrangements, just as the Scottish Ministers have done. Making provision for Northern Ireland directly in the Act ensures that ILAs can be made available to the same timetable across the UK. Subsections (5) and (6) of section 107 and section 109 make provision for Northern Ireland for the same reason.
154.Section 107gives the Secretary of State, or a person designated by him, the power to enter into arrangements with a body which itself is a party to qualifying arrangements under section 105. This body, the central provider, will supply the administrative support for the national system of ILAs. The section enables the Secretary of State to make payments to the central provider. It also allows the Secretary of State to make arrangements for other bodies, which — under the provisions of section 10 — could include the LSC, to manage the contract with the central provider on the Secretary of State’s behalf. In Wales, such arrangements will be made by the National Assembly for Wales. In Northern Ireland, they will be made by the Department of Higher and Further Education, Training and Employment.
155.Section 108 covers England and Wales only. The section sets out the regulation-making powers of the Secretary of State (or, in Wales, the National Assembly by virtue of section 150) to authorise grants for the training and education of individuals who are: party to qualifying arrangements, hold qualifying accounts or who are both party to qualifying arrangements and hold qualifying accounts. Regulations can provide that grants can be paid to persons providing education and training, and it is envisaged that, relying on this power, grants will be paid to the provider who will then deliver discounts on the cost of eligible learning activities. Regulations may provide for conditions to be satisfied for discounts to be paid. These conditions may relate to:
	the types of learning activity;
	the individual’s employment status or whether the individual is in receipt of certain types of benefits;
	the way in which qualifying arrangements are carried out.
156.The conditions relating to the types of learning activity which may qualify for grants may include a condition that it be of a type specified or offered by providers approved by either the Secretary of State or the National Assembly, or a body designated by him or by the National Assembly.
157.Regulations may also provide:
	that the amount of grant to be available for particular types of learning activity and that the conditions attached to the grant may be determined by the Secretary of State or the National Assembly;
	that another body may pay these grants on behalf of the Secretary of State or the National Assembly.
158.Section 109 makes equivalent provision (to that in section 108 for England and Wales) for regulations to set out grant-making powers in respect of learning accounts for Northern Ireland.
Commentary on Sections Part V - Miscellaneous and General Sections 104 to 109: Individual Learning Accounts