Leading article: We need more honesty about the benefits of these Games

The costs of London 2012 were grossly underestimated and the economic benefits grossly overestimated

There is now less than one year to go until the London Olympics and the air is thick with talk of "legacy". There are, of course, the intangible benefits from Britain staging the Games, such as a boost to national pride and children inspired to take up sport. But what of the economic dividend?

The previous government tried to put some numbers on this. A feasibility study for the original 2012 bid predicted a boost from tourism worth £280m to £500m. This was followed in December 2005 by a Department of Culture, Media and Sport impact study that predicted a net benefit to Britain of £1.9bn. Those figures now look likely to prove as accurate as the original £2.4bn estimate of the public cost of staging the Games – a figure that in 2007 was revised upwards to £9.3bn

A report last year by the European Tour Operators Association looking into previous Olympics suggested that the Games could actually have a detrimental effect on tourism for the duration of the sporting event. If London follows the pattern set by Beijing in 2008 there could be two and a half million fewer visitors to Britain next summer.

Then there is the economic uplift from the building work on the various venues. John Armitt, the chairman of the Olympic Delivery Authority (ODA), points out that 40,000 people have been employed in building the Olympic Park and that 98 per cent of the ODA's contracts (worth £6bn) have gone to UK businesses. But that cannot be considered to be a legacy unless one assumes that those workers would not have found employment without the Olympics and that they will remain employed after the Games have closed. Retail jobs will be created in the new shopping centre on the edge of the Olympic site. But, again, what matters is how long these jobs remain after the Games is over. One must also factor in the retail jobs elsewhere that could be displaced by this new mall.

When the Olympic circus has left, London will, of course, have a new sports stadium, swimming pool and velodrome. There will be new homes when the Olympic Village is converted into flats. Some transport links will be improved. But these projects could probably have been built more cheaply. Stratford, a previously depressed area of east London, will have been given a makeover. But, again, this could have been done at a lower cost.

A picture is coming into focus. The costs of the Games were grossly underestimated, leading to a gross overestimate of the net benefit. The reason was politics. Those figures helped to justify the original bid. But that has unravelled. The inflated costs are obvious for all to see. That means the Government and the Games' organisers have to talk up the long-term economic benefits in order to give the impression that the Olympics are effectively paying for themselves.

Yet they should be more honest. This fiction that the Games will prove to be a valuable long-term investment risks insulting the public's intelligence. The fact that the costs are likely to outweigh the benefits does not mean that the Games will prove to be a waste of money. There is much to celebrate and look forward to next summer. But we should not kid ourselves that the fun does not come with a hefty price tag attached.