Leading article: Farewell Vancouver, hello London

We British may not be very much good at sliding on ice, having borne home a single, albeit gold, medal from the Winter Olympics in Vancouver – unless something surprising happens today, the last day. But we are getting better at some Olympic sports. We are now in contention for a medal in "spinning cost overrun expectations", a fairly new event in which Team GB has shown increasing promise in the run-up to the 2012 Olympics.

London beat Paris for the right to stage the Olympics five years ago, with a bid costed at £2.4bn. Two years later, the budget was quadrupled to £9.3bn. Now, as we report today, the Olympic Delivery Agency is confident that it will come in £500m under budget. Well, gratitude for small mercies and all that. The truth is that the initial budget was much too low, and everyone knew it. The present budget was a realistic one when it was set in 2007, which is quite unusual in the history of big public infrastructure projects. Hence the significance of the news that it is likely to be undershot, rather than to billow out to something like the £20bn figure about which there has been speculation.

So the Olympics will be expensive, but they are not an open-ended commitment. And in our view, they will be worth it. Not simply for the worthy reason given, of the regeneration of east London. This newspaper's view has always been that London, even its deprived areas, can look after itself. If there are urban wastelands that deserve public money, they are mainly in Britain's other great cities. But London was the only realistic location for a British 2012 bid, and it made no sense to hold off in the forlorn hope of taking it to Glasgow in 2020.

No, we supported the Olympic bid on the simpler grounds that it is a carnival of national pride and international sporting excellence. At one level, of course, the Games are a circus. Some of the events are ridiculous, and some of them will never shake off the suspicion that the results reflect pharmaceutical ingenuity more than honest effort. One respect in which they are faintly absurd is the number of events that depend on highly subjective marking systems, but at least staging them in London will give British athletes the advantage of home-crowd support. But circuses are also entertainments and celebrations of physical prowess. And the doubts tend to fall away once the action begins. All the pre-Games agitation about China's human rights record was not exactly forgotten in Beijing two years ago, but it was subsumed in the competitive spirit, and in the enjoyment of a televisual spectacle. It was a spectacle that inspired a new generation of young athletes around the world to prepare for the next time.

There are reasons for optimism about the quality of the British competition in 2012 that extend well beyond home-team advantage. Starting under the oft-maligned government of John Major, large amounts of public money have been devoted to widening and deepening the opportunities for young people to take part in sport. There was some angst about the preponderance of British athletes in Beijing whose sporting excellence was nurtured in private schools. But this time there really is a chance to see the benefits of extending such opportunities to the many, not the few.

More than that, though, 2012 is a chance for Britain to show that it can put on a show for the world. We will not need to rely on digitally enhanced fireworks as the Chinese did, or mass displays of robot-humans. We can, rather, celebrate a balance between individual ambition and team co-operation, in an opening ceremony that reflects the relative austerity of the public finances. But it will also do wonders for British confidence if we can run the Games with an efficiency in which we have long ceased to believe. (Although that will mean sorting out the glitches, such as ruining Greenwich Park for the equestrian events.)

The usual method for financing building projects such as the Olympics is to put in an imaginary budget and then rely on the political imperative that failure is not an option to throw money at it as the deadline approaches. That this does not seem to be happening to the 2012 Games is a promising sign. It means that the preparations for the Olympics can focus on the sport, not the scaffolding. It makes it more likely that the Games will be well administered.

If we British can win medals for project management as well as for track, field and tae kwon do, then the London Olympics will be truly spectacular.