Staff at 73 companies in the town providing adult social care, including care homes, will see their hourly pay increase to £9.90 as part of a commitment to support the 'real' living wage.
This is above the National Living Wage for people aged 23 and over, which increased from £8.91 to £9.50 per hour from April 1 this year.
It has been achieved after the council worked with providers to base its fee rates on paying the real Living Wage.
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Providers will use the increase in the fee rate to pay their staff a higher basic hourly pay rate in a move which it is hoped will help them keep staff and boost recruitment.
Coun Jo Farrell, cabinet member for adult social care, said: “It has become clear that the most effective way to address the continuing challenges with recruitment and retention is to improve the pay and conditions of our social care workforce.
“During the pandemic our social care staff were, in my eyes, true heroes giving selflessly to protect the most vulnerable in our communities.
"It is essential that we do what we can to support the recruitment and retention of this most valued work force."
She added: “Monitoring procedures will be put in place to ensure that this investment is being reflected in the pay packets of care staff and I would encourage anyone who is worried about this to get in touch”.
Kevin Lavery, chief executive of NHS Lancashire and South Cumbria Integrated Care Board, also welcomed the move.
He said: "This investment is a good example of the greater integration we need across health and care and aim to see more of going forwards.
“This funding helps to recognise the compassion and care social care staff have demonstrated whilst being instrumental during the pandemic.
"Social care has maintained support to some of those who are most vulnerable in our population and is critical to maintaining people’s independence in the community, as well as supporting them when recovery and rehabilitation is needed.”