THE GRENFELL TOWER FIRE

Extract A:
The number of high-rise* buildings with
dangerous cladding which have not started,
started and completed repair work to resolve
potentially lethal cladding
A breakdown of the population of the Royal
Borough of Kensington and Chelsea,
compared with Grenfell Tower’s local
neighbourhood

Source: Building Safety Programme, 31 May 2019 Source: Supporting health & wellbeing for the
*High-rise is defined as being a block of flats in excess communities impacted by the Grenfell Tower fire
of 10 floors disaster, JSNA, July 2018

Extract B:      Grenfell Tower Fire: What, how and could it have been avoided?
 
On the night of the 14th June 2017, a fire erupted within the London Borough of Kensington and 1
Chelsea. The 24-storey Grenfell Tower block of flats had caught ablaze and 72 had died in the  
immediate fire, with two later dying in hospital. It marks the worst UK residential fire since World  
War II.  

The Grenfell Tower Inquiry began on 14th September 2017, which the government commissioned 5
to find the root cause of how the fire and other related and ancillary issues. The findings from the
first report in October 2019 addressed the events of the night. It was reported that it started due to
a malfunctioning fridge-freezer that was located on the fourth floor, which spread rapidly to engulf  
the entire building. The reason for the rapid spread was due to the building’s cladding (material  
placed over a building to ensure it retains heat, particularly in colder months) and external  10
insulation. Whilst cheap and effective, it could be argued by some that cladding is a demerit good.

This then poses the question, could it have been avoided? As of June 2020, the fire is still being
investigated. One of the parties that would not immediately spring to mind that could be
responsible are the management of the building – the Kensington and Chelsea London Borough
Council. They have long been criticised for not taking effective action prior to the fateful night 15
when the Grenfell Tower fire occurred, and there were multiple complaints before about the safety
of such cladding. Additionally, despite being one of the most affluent councils in England,
Grenfell’s residents were ranked among the top 10% most deprived areas in England in 2015.

Whatever the enquiry or long terms solution concludes, one thing is certain. The fire has not only
caused unavoidable deaths, but caused a rift between government, builders, homeowners, 20
leaseholders and the entire general UK population. Many argue there is an element of both
government and market failure. Are there any ‘fair’ answers to all this?

Source: news reports, 2017-2021

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 Extract C:      Cladding crisis: Homeowners, government or builders?
 
Homeowners trapped in flats in high-rise building covered in cladding could soon be spared from 1
huge bills by an impending Government “reset”. But campaigners have warned the plans will fail  
to protect leaseholders from heft costs. Up until 2021, very little had been done for those that  
dwelled in housing below 18m. However, Levelling Up Secretary, Michael Gove, is expected to  
announce that flat owners in buildings 11 metres or higher will now pay nothing towards the repair 5
of unsafe cladding. Instead, the housebuilders and cladding companies will have to foot the repair  
bill, as it is viewed that their decision to cut costs by some has led to the cladding crisis we now  
face.  
 
It marks the end of a controversial scheme under which the Government would have covered the
costs for buildings above 18 metres in height, but owners in smaller buildings would have needed 10
to take out punitive loans to pay for works. Those long-term loans would have been unattractive to
potential buyers and dragged down property prices, as they would have been tied to the flat, not
the owner.

The change will spare tens of thousands more flat owners from crippling costs. Some 38,000
apartment blocks are estimated to be 11 to 18 metres high, although campaigners put the figure 15
at closer to 90,000. Savings will be significant. Leaseholders have faced average costs of
£40,000 each to rectify unsafe cladding, but bills can spiral in excess of £100,000.

Source: news reports, 2021-2022

Q1.
 
Define the term ‘market failure’ from The Grenfell Tower Fire, Extract B (line 21).

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[3 marks]

Q2.
 
Using The Grenfell Tower Fire, Extract A and given the population of the Royal Borough
of Kensington and Chelsea was 156,197 in 2017, calculate, to the nearest person, the
number of people living in deprivation within the Kensington and Chelsea Borough.

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[4 marks]

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Q3.
 
Use The Grenfell Tower Fire, Extract A to identify two significant points of comparison
between the number of high-rise buildings with dangerous cladding which have not
started, started and completed remediation work to resolve potentially lethal cladding

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Comparison 2 ___________________________________________________________

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[4 marks]

Q4.
 
The UK Housing Market, Extract C (lines 17 to 19) states ‘those long-term loans would
have been unattractive to potential buyers and dragged down property prices, as they
would have been tied to the flat, not the owner.’

Draw a diagram to show the effects of implementing this suggestion on the market for
cladding affected flats.

[4 marks]

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Q5.
 
The Grenfell Tower Fire, Extract B (line 11) states ‘whilst cheap and effective, it could
be argued by some that cladding is a demerit good’

Explain why cladding could be viewed by some to be a demerit good.

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[10 marks]

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Q6.
 
The Grenfell Tower Fire, Extract B (lines 20 and 21) states that ‘many argue there is an
element of both government and market failure. Are there any ‘fair’ answers to all this?’

Use the extracts and your knowledge of economics to evaluate the view that the
government should pay for the cladding crisis in the wake of the Grenfell Tower Fire.

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[25 marks]

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