This might be an allergy or it might be a thyroid problem causing skin issues.
This collie site has links to info on thyroid and skin issues in the breed
http://www.ida.net/users/tonyd/Collie_Health.htm
It could be a fungus or yeast infection.
You can read about skin issues here
www.thepetcenter.com/gen/itch.html
And this site has a list of many of the skin issues possible
www.nzymes.com/Articles/dog_skin_hair_problems.htm
I would suggest as your vet hasn't been able to help you that you consider going to see a veterinary dermatologist. Your vet may be able to refer you to one or you might find one here
http://www.acvd.org/site/view/55607_FindADermatologistAlphabetical.pml
(I just checked and that site is currently having server issues so you might not be able to get to it today.)
With his age I'd suspect possibly thyroid might be the underlying problem. But as he had just been groomed it might have been something he picked up at the grooming shop too that the groomer wouldn't have known about.
Hope this helps you!
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