YORK council finance chiefs say they have made nearly £400,000 for the city's coffers with some smart investments.

The return achieved by treasury officials at City of York Council was 0.57 per cent higher than the normal benchmark used for short-term cash investment.

The council's executive member for resources, Coun Quentin Macdonald, heard today that the dealings during the financial year 2002-03 "generated an excess of £1,390,000 of interest earned over interest payable, equivalent to a 4.22 per cent rate of return".

But a report to Coun Macdonald says one should also take into account the direct costs of dealing and an adjustment for how much the council would receive in interest from a bank.

"In simple terms, the value added by money market trading is estimated at £390,000," the report adds.

The report also explains how the money has been invested, in banks, building societies, local authorities and international institutions.

Updated: 10:52 Friday, June 13, 2003