3.24 The Department made changes to the value for money assessments as more information became available. The first major value for money assessment was made in March 1998. This was amended in April 1998 to include estimates of the costs of allowing Eurostar UK to revert to public ownership, and the fare revenues the Government was foregoing by accepting the LCR deal and not operating the service in the public sector.
3.25 The final assessment by the Department in May 1998 showed that the public sector support for the Link was justified and formed the basis of the Deputy Prime Minister's announcement to Parliament the following month of the key elements of the restructured deal with LCR. The final assessment resulted from more information becoming available. For example, modelling results for benefits and subsidy requirements for domestic services, which were received from the Office of Passenger Rail Franchising7. The costs of Eurostar UK reversion, including estimates of net revenues and debt repayments were also re-estimated as more information on operating costs became available. These showed that Eurostar UK operating costs were higher than previously estimated and the net revenues foregone by restructuring the deal were much lower than in the April 1998 estimate, improving the value for money case.
3.26 Other changes in the May 1998 assessment reflected changes in methodology. These included:
■ the removal of international benefits to non-UK residents, in line with Treasury guidance, which reduced total benefits by some £1,800 million; and
■ the introduction of monetary estimates of regeneration benefits, which increased benefits by some £500 million.