Controversial proposals for cash-strapped Lancashire County Council to scrap paying the Foundation Living Wage (FLW) have been shelved.
County Hall's cabinet were due to discuss the plans on Thursday but leader Coun Geoff Driver announced at the start of the meeting they would not be going forward.
A report had suggested the local authority pay the lower National Living Wage (NLW), the minimum it can pay over-25s, as a cost-saving measure.
It would have hit almost 6,000 lowest-paid workers including cleaners, school dinner staff, lollipop men and women and carers.
The council has said it will now start consultation on "general terms and conditions", such as unpaid leave and sick pay as it looks to reduce its wage bill.
A statement issued by Coun Driver said: "Staffing accounts for more than 70 per cent of our budget so we have to consider these issues, alongside everything else, as we work to tackle the county council's unprecedented financial challenge.
"We are trying to ensure that we continue to offer fair terms and conditions to our staff whilst addressing that financial challenge so that we can continue to deliver vital front-line services for the people of Lancashire.
"Having considered the proposals brought to us today, Cabinet concluded that it would not be right to make changes which would affect our lowest-paid members of staff, so we will continue to pay the Foundation Living Wage, but we have agreed to consult on general terms and conditions, such as unpaid leave and sick pay ."
The council currently pays the FLW of £8.45 an hour. The proposals would have seen that rate of pay frozen until the National Minimum Wage (NMW), currently £7.50 an hour for over 25s, overtakes it and replaces it.
The more generous Foundation Wage was introduced at Lancashire County Council in 2014 by the previous Labour administration.
The “U-turn” was welcomed by Labour opposition leader Azhar Ali. He said: "You have listened to the unions, listened to the opposition and people saying actually by reducing the foundation living wage it would have a detrimental effect on almost 6,000 members of staff."
A review of all staff terms and conditions - tabled to save £5m - will still go ahead.
Labour member John Fillis suggested a “spend to save” approach for boosting health and wellbeing for staff rather than cutting sick pay.
He said: "One of my concerns about ill health is that - if you look at the area I cover - there's a lot of manual work there and when it comes to terms and conditions, there is a higher risk rate when it comes to manual road labour work. I'd ask you to consider that very seriously.
"But to be positive on this, I would ask you to look at a spend to save policy, in other words, how can we keep our staff fitter? How can we protect them from illness, whether they be direct or mental health illnesses. (We should focus on) what we can do by reducing our costs by putting some money up front. I think we would get greater benefit out of that and not lose morale."
A review of charging for non-residential care services was approved by the cabinet also on Thursday.
And an eight-week consultation giving people the opportunity to share their views about the proposed changes will start in the coming weeks.
The charges were last reviewed in 2011.
The proposed charging policy calculates how much people may need to pay towards their non-residential care based on a comprehensive financial assessment.
In line with legislation and with the current policy, people will only be charged for non-residential care according to their assessed ability to pay. Currently more than 51 per cent of people receiving non-residential adult care services are either assessed as not having to pay, are funded by the NHS or are exempt under the Mental Health Act.
County Coun Graham Gooch, cabinet member for adult and community services, said: "The rates we currently charge people are based on 2011 figures and since that time costs have risen by over 14 per cent. Given the county council's current financial position this situation can't continue.
"Under these proposals, as with our current policy, people would only be charged according to their ability to pay for their non-residential care.
"Inevitably some people would have to pay more, but most people would not see a significant increase in care costs.
"Of the 5,694 people paying for non-residential care services, 92 per cent would see an increase in care charges of less than £20 per week. For more than 4,000 people, this increase would be less than £10 a week.
"It's crucial that the system is fair and as part of the ongoing financial assessment process, we already include a free check to ensure people are claiming all the benefits they are entitled to. This will continue under the revised scheme.
"The proposed charging policy is consistent with those introduced by other councils across the country and is in line with the guidelines set out by central government in The Care Act 2014."
Revising the charging policy for all non-residential care services will help to ensure the county council can cover the costs of providing them in the future by generating an extra £2.9m per year, a spokesman for county hall said.
County Coun Gooch added: "Non-residential care covers a range of crucial services which enable people to get the care and support they need to live in their home or community for as long as possible.
"We need to change the way we charge for these services, so that we can continue to provide them in the future.
"This needs to be done fairly with the people who use the services being given every opportunity to share their views. Now the review has been approved, a consultation giving people the chance to let us know what they think will begin.