Corporate failures slow … but is it just the calm before the austerity storm?

The number of firms going under in 2010 has been a fraction of the level seen last year, when company failures soared to a 16-year high. And as the wider recovery has taken hold, the most recent insolvency figures showed company liquidations at their lowest level since the second quarter of 2008.

Within these statistics, company administrations reduced by 35 per cent year on year across England and Wales in the third quarter. Similar figures for Scotland showed a 31 per cent year-on-year fall in corporate insolvencies for the third quarter.

However, the failure of some high-profile names served as a stark reminder that times are still tough and are set to remain challenging as the government spending cuts kick in. The collapse of social housing firm Connaught marked an early casualty of the austerity drive, followed soon after by Rok.

Other well-known names included rail maintenance contractor Jarvis at the start of the year, but there were some surprises in the form of iconic holiday firm Pontin's and Reader's Digest UK, which called in administrators.

Both firms had seen business decline for some years - a trend compounded by the recession.

While Reader's Digest in Britain was rescued from administration, the future ownership of Pontin's has been left unclear with no news yet on a buyer.

From the consumer point of view, one of the worst administrations came in the form of Crown Currency Exchange's collapse. The Cornwall-based foreign currency firm left a trail of more than 8,000 victims when it went bust, with some customers owed as much as 400,000 each.

After two years where retailers such as Woolworths and First Quench bore the brunt of recession, 2010 was less of a calamity for the high street.

However, the sector did not escape unscathed as the group behind troubled menswear chain Suits You failed in October.Administrators said they could not find a buyer for Speciality Retail Group and would close all 66 stores by the end of the year.

However, the move may not spell the end of the Suits You and Young's Hire brands, as they are owned by a separate firm called Baird Group.

Fashion chain Ethel Austin was saved after its previous owner bought the 76-year-old firm out of administration for a second time.

The deal rescued more than 1,000 jobs, although 700 positions were cut by administrators beforehand.

While 2010 was less challenging for many firms, experts have warned against complacency.

The UK government's deficit-busting measures are expected to hit both firms and consumers hard over the next year and could lead to a relapse in failures.

Steven Law, president of insolvency trade body R3, recently warned we could be seeing a "calm before the storm".