“Failing” NHS managers will be denied pay rises if they do not improve patient care or get their finances in order, the Health Secretary will say.

Wes Streeting will tell staff at the NHS Providers conference in Liverpool on Wednesday that there “will be no more rewards for failure”.

Under the plans, senior NHS managers who run big deficits or offer poor services to patients will be ineligible for pay rises.

Mr Streeting will explain that very senior managers like chief executives will be impacted if they fail to improve their NHS trust’s performance, prevent staff from carrying out their roles, or offer poor levels of patient care.

We have got to get a grip on runaway spending and make sure every penny going to the NHS benefits patient – changes will not be popular but it’s a case of reform or die

He will also set out how NHS trusts could be banned from using agencies to cover staffing gaps such as healthcare assistants and cleaners, in a bid to cut the £3 billion a year spent on agency workers.

Those NHS staff who leave permanent jobs could also be stopped from coming back into the health service via expensive agencies.

On pay for senior managers, Mr Streeting said: “I’m prepared to pay for the best and I will defend financial incentives to attract and keep talented people in the NHS.

“It’s a big organisation that should be competing with global businesses for the best talent.

“But there will be no more rewards for failure.

“We have got to get a grip on runaway spending and make sure every penny going to the NHS benefits patient – changes will not be popular but it’s a case of reform or die.

“The Budget made the investment that the NHS needs. The reforms I’m announcing will make sure taxpayers and patients see results.”

In his review of the NHS earlier this year, Lord Darzi found the only criteria by which chief executive pay was set was the turnover of the organisation.

According to the Department of Health, pay does not currently look at how long patients wait for care, the quality of care, the effective running of the NHS or financial holes.

For too long desperate hospitals have been forced to pay eye-watering sums of money on temporary staff, costing the taxpayer billions, and pulling experienced staff out of the NHS. We’re not going to let the NHS get ripped off anymore

The new pay framework for very senior managers will be published before next April, it added.

Regarding agency spend, Mr Streeting will announce a consultation proposing an NHS ban on using agencies to hire band 2 and 3 workers such as healthcare assistants and domestic support workers.

NHS staff would also be stopped from resigning and then immediately offering their services back to the health service through a recruitment agency.

Mr Streeting said: ”For too long desperate hospitals have been forced to pay eye-watering sums of money on temporary staff, costing the taxpayer billions, and pulling experienced staff out of the NHS. We’re not going to let the NHS get ripped off any more.

“Last month, the Chancellor made a historic investment in our health service which must reform or die. I am determined to make sure the money is well spent and delivers for patients.

“These changes could help keep staff in the NHS and make significant savings to reinvest in the frontline.”

The Department of Health said recruitment agencies have charged NHS trusts up to £2,000 for a single nursing shift owing to staff shortages, made worse during strike action.

It argues that the new rules mean greater fairness in the workplace through ensuring staff carrying out the same roles are not paid significantly different amounts.

Last week, a BBC News investigation found senior doctors are charging the NHS premium rates for overtime, as pressure to cut waiting lists is allowing some to make more than £200,000 a year from additional work.

At least half of the 41 hospital trusts that responded to BBC News are paying some of their consultants more than £100,000 in overtime.