Arsonist Mark Elliot was free to start a fire that put lives at risk because he had not been arrested for starting another blaze despite "clear evidence", a court heard.
Elliot had been caught on CCTV lighting rubbish that was piled against a garage shutter, causing around £2,000 of damage.
But despite the clear evidence proving he was responsible for the fire on Beach Road, South Shields, last February, he was not arrested.
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It was only after he started a second, life threatening blaze, at his home in an upstairs flat at Broughton Road in the town, in September, that he faced justice for both fires.
His barrister Gavin Doig told the court Elliot had the opportunity to start the serious flat fire because he was not picked up for the first offence.
Mr Doig said: "Unfortunately, there was clear evidence in the possession of the authorities and they didn't act on it, resulting in him committing a more serious offence."
Prosecutor Annelise Haugstad told the court Elliot lit fires in the bedroom and living room in his flat, switched on the oven and then left in the early hours of the morning, while his downstairs neighbours were in bed.
Luckily, the dad of the family went to investigate when he heard noises from upstairs and saw flames, which he started to extinguish with a hose after getting his wife and step daughter to safety.
The emergency services, who he had called, arrived two minutes later.
Fire crews using breathing equipment forced entry into the upstairs property and extinguished the flames.
The court heard the downstairs neighbour had feared Elliot was "trying to kill him and his family".
Miss Haugstad said the police had been called the night before the blaze when Elliot threw a footstool through his living room window.
He told officers he had injected drugs, wanted to go to prison and was going to bed but had stayed up and lit the fire instead.
Elliot, 33, of Broughton Road, South Shields, admitted arson and arson being reckless as to whether life endangered.
Mr Doig told the court: "He had the opportunity to commit those serious offences because he wasn't picked up for the less serious offence, even though it was crystal clear he committed it.
"His mental health was clearly deteriorating, he was asking to be sent back to prison the night before he committed the most serious offence."
Mr Doig said Elliot has "improved immeasurably" while in custody on remand and is a trusted prisoner with special duties and good references from staff.
Recorder Geraldine Kelly sentenced Elliot to a total of 45 months behind bars and said "multiple people were endangered" by the flat fire.
The judge said Elliot is a "high risk of harm to the public" but has undergone a "remarkable turnaround" in custody.
Northumbria Police have been asked to comment on the failure to arrest Elliot after the first offence.
