Olympic sized overspends - coming to a tax bill near you

I don't normally bother to read The Observer. The Guardian I can usually tolerate (the outstandingly dreadful Polly Toynbee excepted), but the insufferable, hand-wringing, self-satisfied London-centric view of the world held by its Sunday stablemate, can almost always be relied upon to spoil what's left of my weekend.

That said, yesterday's feature on the train wreck that threatens to become of the London Olympics, was worth the cover price alone. Marking a change in tone from their previous sycophantic coverage of the bid, it exposed what many critics of the games have been saying all along: namely, the benefits will be confined in their entirety to London; the 'maximum' £2.4bn price tag had all the integrity of a Labour party fundraiser; and that Lottery Funds will likely end up being plundered to try and plug the gap.

In addition to the howler of forgetting to include VAT in the projected costs, the estimated cost of buying and decontaminating land has tripled from £478m to £1.44bn. The cost of building 40,000 new homes has also risen from £0.5bn to around £1.5bn - another tripling of the original estimate.

£1bn was set aside originally for this 'regeneration', which included that £478m for buying and decontaminating the land. This would in turn have left a balance of £522m for those 40,000 houses to be built, equating to a construction cost of just £12,500 each. Now, I'm no surveyer and I'm certainly no builder, but even I know that you can't build a house for £12,500.

Therefore, even if the £478m purchase & decontamination costs were solid, it should have been blindingly obvious that there wasn't going to be enough left over for the housebuilding to follow. With the overall £1bn figure for regeneration being so obviously wrong, shouldn't it have encouraged someone somewhere to probe a little harder into the quality of the other forecasts?

Brian Coleman, Chair of the London Assembly, now estimates that the cost of the project could rise as high as £10bn and beyond. However, while some of these cost rises can be put down to straightforward sleight-of-hand and others to simple incompetence, one further figure deserves our attention. Namely, the security budget, which has increased from £190m to £850m following, we are told, the 7/7 attacks on the London Underground.

Now I'm sorry, but they can't be allowed to get away with this. The Atlanta bombing in 1996 showed that there were those prepared to target the Olympic games. And in the aftermath of 9/11, the government did not miss an opportunity to remind us how British cities were also under threat from terrorist attack. All 7/7 did was confirm that thesis, so why the sudden need to increase this element of the budget by a factor of 4.5?

Were those costing the bid unaware of the security threat, did they simply underestimate it, or is there perhaps another explanation? Surely no-one would be brazen enough to exploit public fears over terrorism to pad the security element of the costs, just so the other cost increases look a bit more reasonable, would they?