HB,
Is there any hard evidence to show that any Modern Olympics has ever rendered a profit to the host nation? I think not; this is nothing but grandstanding (pardon pun) by UK Gov, with our politicos savouring the kudos of international prestige (they hope).
Greece were the host in 2004 with the Athens games, I think it's fair to say that the current economy in that country is a magnificent indictment of the effect of hosting the modern games.