Although the 707's are indeed shorter than a 6 car 323 the actual cubic space inside for passengers would i suspect be greater than 6 car 323 as the 707 has no internal gangways i.e. like the new tube stock it's one long coach.
Poterbrook have mentioned diesal engine's in 323 which if they where to stay in Birmingham coukd get then to Burton OT via Arlewas i guess. Could that be a plan. Even extend from Cov terminators to Leamington therefore not requiring class 230's inomg tern.
I don't understand why everybody is so keen to dump 707s on the West Midlands franchise. It makes no sense to me to convert dc emus to ac when there is plenty of work for them elsewhere in the South East.
The whole reason why one (and probably both) bidders for WM are looking at high-spec emus is the obligation in the ITT to run a near normal service on CrossCity in the winter leaffall period (page 48 of the Stakeholder briefing). The 707s have been rejected by First/MTR for SW franchise for the same reasons they wouldn't be suitable for WM and CrossCity. I imagine something like a Crossrail Aventra (with 6 cars) or equivalent from Siemens, Hitachi, etc. etc. would be likely choice. It needs to be recognised that it has never proved possible to run a normal service on CrossCity with the 6 tph service and 323s in the autumn, despite various permutations of split service, reduced service and skipped stops tried by LM and before it, CT.
The other problem is that 150 cars is too many for the WM branded services of WM, meaning some would have to go elsewhere. The platforms north of Walsall on the Rugeley line are only about 70 metres long as well and I don't think electrification is planned to include platform extensions. Note sure that the ORR would approve of SDO north of Walsall.
Hybrid 323s on the Coventry to Leamington service isn't a runner either as 323s are rarely seen at Coventry; they normally don't work east of Birmingham International and all the Coventry services are normally 350s these days. I would have thought a couple more 153s would be more likely, at least initially - perhaps replaced by 170/5s if new bi-modes are leased for the Shrewsbury services.