Advice bureau boss forced to quit after just a week as Government vetoes appointment

THE former head of a city college who quit amid a probe into a £20 million funding shortfall has lasted just a week in his new high-profile job – after the Government vetoed his appointment.

Howard McKenzie, who was principal of Jewel and Esk College, took up the 60,000-a-year position as chief executive of Edinburgh-based Citizens Advice Scotland (CAS)– which runs the country's Citizens Advice Bureau – just seven days ago.

He resigned yesterday after Lord Mandelson's Department for Business,

Innovation and Skills (BIS), which funds CAS, confirmed it "did not choose to appoint him and were not in the position to accept him as accounting officer".

The 54-year-old resigned from his college job last April following an investigation into the massive funding shortfall. The college insisted the resignation and the investigation were not linked, pointing out he had served for eight years and was planning to leave at the end of the academic year.

CAS announced earlier this month that it had hired Mr McKenzie, from Livingston, as its chief executive, which would have included duties such as handling grant-in-aid money. However, that has now been blocked by the Department for Business.

A spokesman said: "The accounting officer must ensure annual grant-in-aid given to CAS is used properly and for the purposes for which it is given.

"He or she will be accountable to BIS and parliament for that aid. In this particular case, the department felt it could not make the appointment. It is unusual for us to make a decision like this."

Mr McKenzie had already been quoted on the CAS official website saying he was "absolutely thrilled to have been appointed" and was "looking forward to being a part of that team".

He told the Evening News that he would now be focusing on running his independent management and consultancy business, Howard McKenzie Scotland Ltd, which he set up in September last year from home.

He said: "I've picked up a lot of clients recently and I want to focus on them. The job with CAS had not been entirely finalised. I was being trained in the office this week, but had not signed a contract.

"I am disappointed but will focus on my independent business, which has been going like a rocket since New Year."

Director of CAS Dominic Notarangelo confirmed that Mr McKenzie had resigned from the CEO position but said he could not discuss staff matters.

He said: "We have received a letter of resignation from Howard but will not go into staff matters. We will discuss appointing a new CEO at a board meeting early next month."

As principal and chief executive of Jewel & Esk College, which has campuses in Edinburgh and Dalkeith, Mr McKenzie was involved in a 55m redevelopment of the 9,000-student further education institution.

But the college's finances were the subject of concern and auditors were called in.

A draft report by the auditors, Gardiner & Theobald, is understood to have identified a 20m funding shortfall, which was due to a proposed land deal being put on the back-burner because of economic conditions.