In a letter to councils, Mr Kwarteng said: “My message to you today is simple: businesses need you and your staff to help them through this period. The funding we have allocated needs to get to businesses to protect jobs, livelihoods and communities.

“The sooner applications are processed and funds are distributed, the sooner we will be able to provide businesses with the confidence and security they urgently need.”

By the end of November councils had received more than £2bn for additional restrictions support grants – mostly allocated by July – but were still sitting on £253m of it, indicating delays in reaching businesses in need.

Mr Kwarteng has encouraged officials to take part in the “national effort to beat the virus” more quickly with the next round of funds.

Omicron grants totalling £635m are available as part of the new scheme for hospitality, leisure and accommodation businesses across England, with £100m for companies which fall between the cracks of the support schemes, and equivalent cash for distribution by the devolved administrations.

“I am calling on councils across England to continue to do their bit in the national effort to beat the virus while safeguarding jobs and businesses. Hard-working people across the country are counting on you,” Mr Kwarteng said.

The Federation of Small Businesses has previously criticised councils for slovenly distribution of support. Mike Cherry, the FSB’s national chairman, welcomed the call as firms suffered a tough Christmas trading period.

“It’s good to see the Business Secretary chivvying local authorities along where grants are concerned. Councils have presented a mixed picture over the pandemic – some have allocated support grants rapidly through streamlined approval processes, others have been much less efficient,” he said.

“The hospitality support and additional restriction grant top-ups announced just before Christmas have been reaching those in need far too slowly. The £1.5bn business rates relief fund launched almost a year ago has moved at a glacial pace.”

Clothing retailers bore the brunt of the December slump as non-food stores suffered a 7.1pc sales drop in a worse-than-expected festive season for the sector. Fuel sales slipped 4.7pc as the return to home working advice cut commuting.