Born in Edinburgh, MacKay graduated from the University of Edinburgh with a MA in Politics and Modern History. Before entering politics, he worked for Shelter Scotland and served as parliamentary researchers to Adam Ingram and Mo Mowlam, and was political adviser to Henry McLeish. In the 1995 Scottish local election, MacKay was elected to the City of Edinburgh council, and was later appointed Convenor of Finance in the council's committee in 1997. He stood down as a councillor following his election to the Scottish Parliament in the 1999 election.
MacKay was elected to the City of Edinburgh Council in 1995 and was appointed Convener of Finance in 1997. As Finance Convenor, he had responsibilities for shaping and delivering Edinburgh's annual budget and reviewing expenditure, service delivery and service reform.[5] In 1999, he stood down from local government following his election to the Scottish Parliament.
In July 2000, calls for MacKay to resign by opposition parties were made after he wrongly claimed the sex offenders register in Scotland was a matter reserved for Westminster. He later admitted it was a devolved issue for which the Executive was responsible for. Lyndsay McIntosh, the Scottish Conservative's deputy home affairs spokeswoman, called for his resignation, stating: "I think Mr MacKay has to consider his position... If he doesn't know the scope of the job and doesn't know his responsibilities then perhaps someone else should be doing the job". MacKay rejected calls for his resignation and focused on plans to introduce tougher guidelines on the monitoring of sex offenders. He said that from there would be a better system of information-sharing for police, councils and social workers and "the guidance will include advice on how these bodies can carry out risk assessments, not just of offenders on the register, but on other individuals with a previous conviction for a sex offence, or individuals suspected of such activities, who are giving cause for concern".[7]
As Deputy Minister for Justice, MacKay also had responsibility for drug policy. Following a trip from New York, United States, in May 2000, he unveiled the Scottish Executive's ten year plan to tackle the drug crisis in Scotland. Despite the launch of his new anti-drug campaign, the Executive failed to increase spending on tackling drugs. MacKay revealed the campaign would aim to young drug takers as young as eleven. "What we have to remember is that drugs and the drugs dealers are a very organised lot and they go out to recruit new customers at a very young age," he stated. MacKay added that the Executive was working hard to produce legislation allowing the assets of known drug dealers to be seized, but new legislation would have to be in line with the European Convention on Human Rights.[8]
When McLeish resigned in 2001, McConnell was elected as his replacement unopposed. In McConnell's first cabinet reshuffle, MacKay was sacked from Cabinet.[9]
In 2003, MacKay, with Gail Hannah, founded
MacKay Hannah Ltd in Edinburgh "to Influence policy making, Inform policy development, Connect with decision makers and build Networks."[11][12]