Senior NHS managers including chief executives could have their contracts linked to their organisation’s performance in the new Care Quality Commission ratings.

As part of the government’s response to the Francis inquiry into care failures at Mid Staffordshire Foundation Trust, a project is under way to ensure failure by healthcare leaders on the “very senior manager” contract results in “direct consequences” for them personally.

NHS Employers has been commissioned to lead this work and will develop plans in partnership with the CQC, the NHS Trust Development Authority and Monitor to better performance manage senior leaders.

The work is part of the government’s drive to increase accountability of senior managers and clinicians in the wake of the Mid Staffordshire care scandal.

In its response to the Francis report, published last week, the government said: “There must, on occasion, be direct consequences for senior managers for failures in their organisations. NHS Employers will… develop guidance to support the effective performance management of very senior managers in hospitals through appraisal and other means, including linking the chief inspector’s ratings to individual contracts.”

Very senior managers (VSMs) include chief executives, executive directors and directors reporting directly to the chief executive. There are 660 of them across NHS trusts and foundation trusts.

It is unclear if the changes proposed by the government in response to the Francis report will be applied to all very senior managers and their equivalents or only those working in NHS trusts.

Some senior leaders in foundation trusts are not on the very senior manager contract but are subject to similar pay scales and terms.

David Amos, a former NHS human resources director and consultant, said: “I don’t see how this could work in practice, even if it is well intentioned.

“This undermines the collective corporate role of the board and could create almost a three tier system as it will only apply to certain trusts and organisations and then only those on a board with a VSM contract − non-executive directors and medical directors are unlikely to be on the VSM contract, as consultants.”

The government has also announced a fit and proper person test for board level appointments across the healthcare sector, with the CQC able to bar directors classed as unfit. The barring scheme will be kept under review and ministers have not ruled out future legislation if it fails to work.

A spokesperson for NHS Employers said: “We are at the information gathering stage so there are no additional details to discuss at this time.”