The authority's cabinet agreed to the changes after hearing that the level and nature of payments made to foster parents in Lancashire had fallen behind other local authorities and independent fostering agencies.
It comes as new figures reveal that more fosterers have recently left the county council-run service than are expected to be recruited.
Between April and December 2021, 71 carers resigned - up from 64 across the whole of the 2020/21 financial year. Meanwhile, just 50 new recruits are forecast to be approved during 2021/22 - even though the authority aims to take on 75 new fosterers each year.
County Hall has not reviewed the so-called “skills fee” for its foster carers since 2011. That is the amount paid to them in recognition of their experience - and is in addition to the basic “boarding” fee for youngsters in their care, which is updated nationally each year.
The top-level “tier 3” skills payment in the county council area - for those looking after children with complex needs - has also historically been tied to a reward for making a wider “contribution to the service”, such as mentoring other foster carers and providing peer support.
That element of the skills fee will now be decoupled and turned into a standalone payment after cabinet members were told that some foster carers have transferred to independent agencies, because they are able to achieve an equivalent of the Lancashire tier 3 fee - but without the need to do additional work for the good of the service as a whole.
A new flat-rate “Lancashire Foster Care Fee” will now be introduced - replacing the previous tiered skills payment. It will instead be determined by the ages of the children being looked after. For carers of newborns to 10-year-olds, the payment will be set at £200 per week, increasing to £240 per week for those aged 11-17.
A previous “tier 3+” fee – which was paid to households caring for young people with the most significant additional needs - will be retained, but split into two new categories.
Carers of children with complex needs - including, but not necessarily limited to, those related to health or disability - will receive a £345-per-week Lancashire Foster Care Fee.
Those looking after children who are stepping down from a residential placement, have experienced multiple fostering breakdowns or are assessed as needing a solo fostering placement will be in line for £400 per week.
The boarding payments are unaffected by any of the changes and they remain at £138 (0-4-year-olds), £152 (5-10s), £173 (11-15s) and £203 (over 16s). Allowances are also given for birthdays, holidays and religious festivals.
Lancashire County Council leader Phillippa Williamson told the cabinet meeting where the new payments schedule was agreed that the authority's foster carers were doing an “incredible” job, adding: “It's right that we pay them the fees to support [them].”
Conservative cabinet member for children and families Cosima Towneley said that the revised fees should make the county council more competitive with a private sector that is “not subject to the constraints that [local authorities] have to operate under”.
Labour deputy opposition group leader Lorraine Beavers welcomed the review, which she had been “desperately needed”.
At the end of last year, there were 551 fostering households in Lancashire.
The county council has broadly similar numbers of children placed directly with families as it does housed via agencies - but the cost of the latter arrangement is more than double that of the former, at £352,000 per week compared to £165,000 per week as of last June.