There is a myth that the London Olympics were delivered within budget. This claim was used recently by David Cameron, the British prime minister, to win support for the proposed high-speed rail line to Birmingham.
The principal relevant facts are these. The first detailed specification of what was needed for London to host the games was drawn up in 2002 by Arup. The report by the engineering and planning consultancy put the cost at £1.8bn, much of it to be privately financed. An extended assessment was then commissioned by the Department of Culture, Media and Sport from PwC. The financial consultancy’s 2003 report estimated the total cost at £3.1bn, requiring a public subsidy of £1.3bn. The balance would be recovered from the private sector and from asset sales after the games. According to PwC’s risk assessment, the probability that the taxpayer would need to provide as much as £2bn was less than 5 per cent.
The detailed bid submitted to the International Olympic Committee in 2005 set out a total cost of £4.2bn. In accepting London’s proposal, the IOC commented that the operating cost budget seemed realistic; and that, since the British government had committed to underwrite expenditure on infrastructure and facilities, it was unnecessary for the IOC to review the cost assumptions further.