Value for money assessment
Purpose
This section provides a light‑touch Stage 1 Value for Money (VfM) assessment for Reston Railway Station at an observed (Post-Opening) stage. The assessment is intentionally proportionate and is designed to establish the direction of travel for VfM, rather than to replicate the full monetised economic appraisal completed at Full Business Case (FBC) stage.
This Stage 1 VfM assessment combines final outturn present value cost information with order‑of‑magnitude evidence on operational performance, including observed passenger demand, service characteristics and journey times. It does not seek to derive a revised Benefit–Cost Ratio (BCR).
While this assessment focuses specifically on Reston Railway Station, it should be noted that the economic appraisal undertaken at FBC stage considered Reston and East Linton as a combined scheme. The findings of the FBC therefore provide important context for interpreting the results presented here.
Economic Context
At Full Business Case (FBC) stage, the economic analysis (which assessed Reston and East Linton stations as a combined scheme) anticipated that the stations would generate local benefits through improved rail accessibility, reduced generalised travel costs and user journey time savings. However, because the introduction of additional stopping services on the East Coast Main Line (ECML) affects longer‑distance services, the appraisal also identified disbenefits to long‑distance rail users, primarily in the form of increased journey times.
When assessed as part of the combined Reston and East Linton scheme, these disbenefits, together with high capital and lifecycle costs, resulted in a negative Net Present Value (NPV). Even when cross‑border disbenefits were excluded, the forecast Present Value of Benefits remained significantly lower than the Present Value of Costs. As a result, the scheme was categorised at FBC stage as offering poor value for money.
This stage of evaluation focuses on whether the intended local benefits are emerging in post‑opening evidence, using a proportionate approach rather than re‑running the full appraisal model.
Methodology and Data Used
The assessment adopts a qualitative, component-based approach, focusing on a comparison between Predicted (Business Case) assumption and Observed (Post‑Opening) outcomes across the main VfM drivers.
Evidence has been drawn from a range of sources, including cost data, operational performance, and indicators such as passenger demand, service patterns and journey times. These inputs are used to assess whether the expected benefits are beginning to emerge and how these align with the scheme’s underlying VfM drivers.
To implement this methodology, the following data and evidence have been used.
Cost
Costs have been reviewed to determine whether scheme delivery has remained within the cost envelope assumed at FBC stage, and whether any divergence between forecast and outturn costs is likely to alter the overall VfM position.
- Predicted (FBC): Present Value cost assumptions for Reston used in the economic appraisal, including the breakdown of capital costs and long‑term maintenance and operating costs.
- Observed (Post‑Opening): Outturn capital costs following scheme delivery, together with indications of operating and maintenance costs.
This comparison provides an indication of whether cost overruns or savings are likely to materially strengthen or weaken VfM relative to the business case position.
Fares and Revenue
Fares influence user charges and revenue impacts within the economic framework. A proportionate review of fares and revenue has been undertaken, recognising that revenue is not a primary driver of VfM for this scheme and that the FBC includes limited detail on revenue assumptions, with values relatively small over the 60‑year appraisal period.
- Predicted (FBC): Implied average fare and revenue assumptions embedded within the economic analysis supporting the FBC.
- Observed (Post‑Opening): Where available, a comparison with current fare levels or ticket price structures for representative journeys, used as a sense‑check rather than as a full revenue re‑
This approach helps to assess whether revenues are broadly in line with expectations and whether any divergence is likely to materially affect the VfM position.
Demand
Passenger demand is a key driver of user benefits, including journey time savings and reductions in generalised travel costs, and is therefore central to the VfM assessment. Demand evidence has been used to assess both the accuracy of forecasts at FBC stage and whether the scale of realised benefits is proportionate to expectations.
- Predicted (FBC): Annual passenger demand forecasts for Reston derived from the economic analysis supporting the FBC.
- Observed (Post‑Opening): Observed station usage based on the latest available Office of Rail and Road (ORR) entries and exits data.
This evidence enables an assessment of whether patronage levels are tracking Predicted (FBC) expectations and the extent to which benefit realisation may differ from the business case.
Proposal
A review of the delivered proposal has been undertaken to confirm whether the station has been delivered in line with the scheme design assumed in the FBC. This helps to establish whether any difference between forecast and observed outcomes is likely to be driven by performance factors (such as demand or service patterns), rather than by changes to the scheme itself.
- Predicted (FBC): Station specification and facilities described in the FBC (platforms, step‑free access, parking, passenger information systems, etc.).
- Observed (Post‑Opening): Evidence on delivered scheme characteristics (consistency with intended outputs and delivered parking provision)
Journey times
Journey time savings were a key benefit driver in the Predicted (FBC) economic case, reflecting the perceived advantages of rail compared with other modes and existing travel patterns. At this stage, journey times have been reviewed to assess whether the level and direction of time savings assumed in the FBC appear to be emerging in practice.
- Predicted (FBC): Indicative journey times referenced in the FBC business case and supporting appraisal material (for example, Reston–Edinburgh and Reston–Newcastle).
- Observed (Post‑Opening): Typical journey time ranges based on current operator timetables.
This comparison provides an indication of whether journey time benefits are being realised broadly as expected, or whether deviations may be influencing the VfM outcome.
Assessment
Table 63 summarises the Value for Money (VfM) indicator set for Reston Railway Station and presents predicted (FBC) benchmarks alongside post‑opening evidence to support interpretation. Predicted (FBC) values reflect assumptions and forecasts used in the Full Business Case appraisal, while post‑opening values draw on the best available evidence following scheme delivery, including observed station usage and current journey time characteristics.
The indicators focus on the principal drivers of VfM at this post‑opening stage, costs, demand, delivered scope and journey times. The table does not provide a monetised re‑appraisal or revised Benefit–Cost Ratio; instead, it is used to assess the direction of travel for VfM and to identify whether outcomes are aligning with, or diverging from, business case expectations.
| Component | Indicator | Predicted (FBC) | Observed (Post‑Opening) |
|---|---|---|---|
| Costs | Capital Costs | £19,970,000 (Capital Cost Estimate) | £21,165,000 (Outturn Cost) |
| Costs | Operating and Maintenance Costs | £145,500 per year. | £115,417 per year. |
| Benefits | Demand at Stations | 49,897-51,692 entries and exits per annum (forecast range). | 29,896 passenger entries and exits (latest available ORR data, April 2024-March 2025). |
| Benefits | Proposal | Two platforms, shelters, lighting, seating, Customer Information System (CIS), long-line public address system (LLPA), CCTV, lifts and pedestrian bridge for platform-to-platform access. 70 parking spaces (15% electric charging points, 5% accessible) plus CCTV, lighting, a bicycle rack and a bus turning circle for local and replacement services. | Final Network Rail design is consistent with FBC outputs, including an unstaffed station with two platforms and a lift/overbridge arrangement. |
| Benefits | Journey Time | 45-minute journey time to Edinburgh. | Average 40-42 minute journey time to Edinburgh. |
| Benefits | Journey Time | 55-minute journey time to Newcastle. | Average 60 minute and 64 minute journey time to Newcastle. |
| Benefits | Revenue | The financial/economic appraisal within the FBC shows no net positive operating revenue. | Total operating revenue estimate for Reston Railway Station of between £313,422 and £383,071. However, it cannot be estimated how this impacts the scheme value for money at this stage. |
Likely Impacts on Value for Money
Cost Impacts
Outturn capital costs for Reston are higher than the predicted (FBC) estimate (£21.165m compared with £19.97m). This increases the cost side of the VfM balance and therefore reduces NPV and weakens VfM, as higher investment costs require proportionately higher benefits to achieve the same overall value for money outcome. Even if demand and benefits were to meet predicted (FBC) forecasts, the higher outturn capital cost would still result in a more negative NPV than anticipated at business case stage, all else being equal.
Operating and maintenance costs for Reston are lower than the annual assumption cited in the FBC (approximately £115.4k compared with £145.5k per year). Lower ongoing costs reduce the lifecycle cost burden and therefore have a positive effect on NPV and VfM. However, the magnitude of this saving is relatively modest when set against both the capital cost increase and the scale of the demand shortfall, meaning the overall VfM effect is unlikely to be significant.
Benefit Impacts
Observed Reston demand is materially below the predicted (FBC) forecast range for the first years of operation (29,896 entries and exits compared with a forecast of 49,897–51,692), representing a shortfall of around 20,000–22,000 entries and exits, approximately 21,500 below the forecast level referenced at this stage (2026). Passenger demand is the key driver of benefits in the economic case because user benefits, such as journey time and generalised cost savings, scale with the volume of trips made. Lower‑than‑forecast demand therefore implies proportionately lower realised benefits and a more negative NPV and VfM position than assumed within the FBC.
The delivered Reston Railway Station appears broadly consistent with the facilities and specification assumed at business case stage, including two platforms, step‑free access via lifts and an overbridge, passenger information systems, and parking and interchange provision. Where scope is consistent, the benefit mechanisms assumed in the business case remain applicable, and there is no basis to expect additional benefits or disbenefits arising from material scope change. As a result, VfM is not materially affected by design variance and divergence from the business case position is more likely to be explained by demand and cost performance.
Observed (Post‑Opening) journey time evidence indicates a mixed outcome relative to business case assumptions. Journey times between Reston and Edinburgh are approximately 40–42 minutes compared with a 45‑minute assumption, representing an improvement of around three minutes and the potential for a small increase in benefits through improved generalised journey times for that market. In contrast, journey times between Reston and Newcastle appear closer to 60–64 minutes compared with a 55‑minute assumption, reducing benefits for longer‑distance trips. Similarly, this is unlikely to have a significant impact on the disbenefits that have been quantified for long distance trips with time savings for journeys to and from Edinburgh being offset by extended journey times to and from Newcastle. Overall, the net VfM effect of journey time changes is likely to be modest and insufficient to offset the larger negative influence of lower‑than‑forecast demand on the scale of benefits realised.
The financial/economic appraisal within the FBC showed no net positive operating revenue but did not provide an estimation of revenue. The Observed (Post-Opening) evidence suggests that the railway station has an estimated operating revenue of between £313,422 and £383,071 per year.
Overall, the strongest VfM drivers at this stage are the capital cost overrun and the demand shortfall, both of which worsen VfM. Lower operating costs and slightly faster journey times to Edinburgh and Newcastle provide only limited offsets and do not materially alter the overall conclusion.
Economic Appraisal Omissions
Review of the Full Business Case indicates that a number of potential benefit streams were not fully captured or monetised within the core economic appraisal. While this is not unusual for rail station schemes, particularly in more rural contexts, it is important to acknowledge these omissions when considering overall value for money at this stage.
- The appraisal did not explicitly account for station facility benefits. New stations can deliver benefits associated with improved quality, comfort and accessibility when compared with alternative modes or older stations that may lack modern facilities or fail to meet current design and accessibility standards. Reston Railway Station provides step‑free access, modern passenger information systems and improved waiting environments, which may enhance perceived journey quality beyond pure time savings. While these benefits are real, they are difficult to monetise and are generally small when compared with journey time benefits; as such, they were not included in the core appraisal.
- The FBC does not quantify active travel benefits associated with access to the station. A shift from private car use to rail can generate additional physical activity through walking and cycling at either the trip origin or destination. These first‑ and last‑mile effects can be appraised using tools such as the DfT’s Active Mode Appraisal Toolkit. In principle, inclusion of these benefits would increase the Present Value of Benefits. However, given current demand levels at Reston and the predominantly rural catchment, the overall scale of active mode benefits is expected to be modest at this stage.
- The FBC states that wider economic impacts (including agglomeration effects and land value uplift) were expected to be small or negligible, reflecting the low density of population, employment and businesses in the immediate catchment. While additional benefits of this type could materialise over the longer term, particularly if accessibility improvements support incremental development or land use change, there is currently limited evidence to justify their inclusion within a VfM assessment at this stage.
Overall, while these omitted benefit streams could marginally increase total benefits, they are unlikely to be sufficiently large to materially change the VfM conclusion, particularly in light of lower‑than‑forecast demand and higher‑than‑forecast capital costs.
Value for Money Conclusion
At Full Business Case stage, the combined Reston and East Linton scheme was assessed as offering poor value for money, driven by high capital costs relative to anticipated benefits and disbenefits to longer‑distance rail users arising from additional ECML stops.
The post‑opening assessment for Reston Railway Station at this stage indicates that the key drivers underpinning this conclusion have broadly materialised. Capital costs are higher than forecast, while observed passenger demand is materially below forecast at this stage. As demand is the primary driver of journey time and generalised cost benefits, the scale of realised benefits is likely to be lower than anticipated in the business case.
Although operating and maintenance costs are lower than assumed, and journey times to Edinburgh are slightly faster than forecast, these factors provide only modest offsets. They are insufficient to counterbalance the combined effects of higher capital costs and lower‑than‑forecast demand.
Taking all evidence together, benefits are still unlikely to exceed costs, and the Net Present Value for Reston is therefore likely to remain negative at this post‑opening stage.
The overall VfM assessment for Reston Railway Station consequently remains poor, and the conclusions set out in the original business case remain directionally valid.