A Newton Aycliffe-based multi-millionaire is to put his business in a trust to pump profits into the local community – instead of passing on his £30m fortune to his children.
John Elliott will today reveal his plans for the future of Ebac, which employs 200 people at its Aycliffe factory.
And his two daughters will be by his side as he announces that his company will not be passed on to them, but invested in a pioneering scheme to protect manufacturing jobs in Newton Aycliffe.
Mr Elliott, 68, told The Northern Echo today: “Instead of passing the business on to the family, I have decided to reject conventional thinking and create a structure that will ensure profits are used for long-term manufacturing investment.”
His daughters, Pamela Petty and Amanda Hird, are happy with the plan.
Mrs Petty said: “We will still do our jobs with the company, and it was never our expectation that we would take it on.”
The ownership of the company will be given to a trust, which will be directed to ensure that the firm – which has its HQ on Aycliffe Industrial Park – remains in County Durham, rather than relocate to cheaper eastern Europe, and will continue to help community groups, like West Auckland Football Club.
Mrs Petty said: “This will cement Ebac’s place at the heart of the community as an employer committed to the long term – this is more important than family wealth and the approach my father has taken is strongly endorsed by all his children.”
Mr Elliott grew up at Lands, on the edge of Cockfield Fell, where he set up his first business as a poultry farmer as a teenager.
He left Toft Hill County Mixed School at 15 and served his time as an electrical engineering apprentice in Bishop Auckland, before sketching out a design for a dehumidifier “on the back of a fag packet” for a client.
Ebac – Elliott Brothers Air Control – was formed in 1973 to make the unit. It now has an annual turnover of £15m and makes £3m a year profit.
Mr Elliott was awarded an MBE in 1986 for his services to small businesses and featured as the first secret millionaire in the Channel 4 television programme of the same name.
He entered the Sunday Times Rich List in 2005 as the North-East’s 17th richest man, with a fortune of £70m.
He said: “Now is the right time to put an end to my status as a Rich List millionaire and create a lasting foundation to secure the future of Ebac’s manufacturing facilities for generations to come.”
The grandfather-of-six said selling the business would destroy its community ethos and jeopardise its chances of remaining in south Durham, and he felt that passing it on to his family would not guarantee its success.
“We’ve all heard of ‘from clogs to clogs in three generations’,” he said. “In families, there are things that are unsaid but that are understood, and this was one of those. When we talked it through, they were relaxed about it.”
Pamela will continue as managing director and Amanda as operations director. His wife, Margaret, is involved as a human resources consultant.
The company also manufactures water coolers and air source heat pumps, and sees potential in building washing machines.
In future, four trustees will oversee ownership of Ebac.
They will not be allowed to sell the business for personal profit and will be charged with reinvesting profits and maintaining it as a manufacturer in south Durham.
Mr Elliott will be one of the trustees, along with two former employees, Cliff Lavery and Paul Elliott (no relation).
A fourth community-based trustee is hoped to be appointed for a three-year term to oversee the profits which are distributed among the community. As well as sponsoring the Wembley-bound West Auckland football team, Ebac supports Durham and Bishop Auckland cricket clubs, and Durham’s Olympic rowing hopeful Nathaniel Reilly-O’Donnell.
“The first objective is to expand the business, but that means more surpluses can be given out, and I think that as an employer you have a responsibility to support worthwhile causes in your community,” he said. “We don’t try to make things easy for people, but to make things possible for them – we bought a better boat for Nathaniel, but he still has to do all the training.”
Mr Elliott will sign away the business today before an invited audience, including the former trade minister Lord Digby Jones.
Mr Elliott said: “Perhaps I should sell it all and retire to the south of France, but I believe that this innovative approach will deliver substantial recurring sums for community initiatives and enshrine our community ethos for the benefit of all.”