Leading article: The cost of victory

We now see how grossly inaccurate the original estimates of the costs of London hosting the 2012 Olympics were. The Culture Secretary, Tessa Jowell, read out a statement in the Commons yesterday in which she admitted that the full budget for the games will be £9.35bn. This is almost four times the estimate of £2.35bn put forward when London was bidding for the games two years ago. Some accuse the Department for Culture, Media and Sport of deliberately underestimating the cost to get the bid past the Treasury. Others suggest that the original calculations were hastily put together on the back of an envelope. Whatever the reason, now is the time for the Government to get a grip.

Yet there are some worrying signs from Ms Jowell's statement yesterday that the Government has still not learnt its lesson. Much more clarity is needed on these costs. We were given only vague headings yesterday such as £600m for "wider security". It will require rather more explanation to justify a sum that would wipe out the better part of the NHS deficit at a stroke. £3.1bn for the "construction costs" of the Olympic Park seems very high. The establishment of a colossal £2.7bn contingency fund is simply foolish. If the Olympic Development Authority knows such a fund exists, it will inevitably treat it as part of its budget from the start.

An extra £675m is to be taken from the National Lottery to help pay for the Games. Ms Jowell neglected to mention that this entails a significant opportunity cost. Less will be available for other potential lottery beneficiaries. There is a real danger that while London will be left with some magnificent new sports venues, regional lottery sports funding will be squeezed.

And then, of course, there is the prospect of even greater demands on taxpayers as the date approaches. This Government has a poor record of bringing big infrastructure projects in on budget. The Millennium Dome came in hugely over. Ambitious new IT systems have been a disaster area. And the control of costs by ministers in the public services has been lamentable. A lot of money has been spent in recent years, but not always very productively. We must not find ourselves in a situation where ministers come back to Parliament to announce that yet more money will be needed to deliver the Games.

This newspaper welcomes the fact that the Olympics are coming to London. It would have been preferable if another British city more in need of regeneration than London had been put forward. But now that the capital has been chosen, it is incumbent on Britain to put on a good show. Not, however, at any cost.

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