The new instructions, published today (22 March), encourages councils to direct the finding towards businesses impacted by the pandemic, but unable to access other means of financial aid such as the Restart Grant Scheme.
This includes contract caterers, which tend to operate out of the properties of others; events businesses; and the thousands of suppliers to the sector.
The ARG was set-up in November last year and is designed to support businesses that are severely impacted by Coronavirus restrictions, may not be in the business rates system, and are not entitled to wider grant support.
Trade body UKHospitality has also urged local authorities to ensure ARG funding finds its way to hard-hit businesses to ensure the whole of the hospitality sector is properly supported.
“This is another pragmatic move by the Government," says Kate Nicholls, UKHospitality chief executive.
"It is reassuring to see that Westminster understands that the impact of the COVID crisis on hospitality goes deeper than closed venues on high streets. The pain is being felt throughout the totality of the sector.
“Less visually prominent businesses like suppliers, catering businesses and event spaces have been hit just as hard. The support has to make its way through to these businesses as well. Too many of our members have reported that they have struggled to access grant support and are at risk of being left behind. This must end.
“UKHospitality has been urging the Government to acknowledge this and highlight this point to local authorities. It is good to see our voices being heard. Local authorities must now take this guidance to heart. They must act to ensure valuable businesses in their areas receive the support they desperately need.”
It comes one the same day that guidance on the Restart Grant Scheme is also published.
Councils across England will receive the funding at the beginning of April, and have been ordered by Government to distribute the grants 'as soon as possible'.
The £5bn scheme will give hospitality businesses access to one-off payments worth up to £18,000 per property.
Properties with a rateable value of £15,000 or under will receive £8,000; those with a rateable value between £15,000 and £51,000 will get £12,000; and businesses with properties that have a rateable value of £51,000 or over will be entitled to £18,000.