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The review is being undertaken following sector feedback received by the department about the FHI, which has been in use since 2015.  

The department has engaged WA Treasury Corporation (WATC) to undertake the FHI review. WATC has so far held meetings with DLGSC as well as WALGA, and LG Professionals WA to inform the review.

In looking at the way in which the FHI is calculated, the review will consider a number of factors including work already undertaken by WALGA, and the department.

The FHI was created using the seven financial ratios reported by local governments. It calculates a score out of 100 with a score of 70 or above deemed to indicate a financially sound local government.

Since it was first published on the MyCouncil website, it has been regarded as an important transparency tool for the Western Australian public. 

The WA Treasury Corporation will use initial feedback to inform follow up research for their review.

It will engage in targeted consultation with the sector, including ongoing involvement of the peak bodies and the WALGA Finance Industry Working Group.

The current timeframe is targeting a report by the end of August 2022.

It is planned that DLGSC will look to implement any changes on the MyCouncil website in the first half of 2023.