That's where the Class 230 falls down - the problem with the Class 230 is that it's a unit that's a quarter of the cost of a new unit, with a quarter of the life expectancy. It can't be cascaded onto a diesel depot serving one or two routes, when it's going to be life expired 10 or 15 years from now.
I see that as a strength (in terms of the 230s) - we only need extra DMU capacity for another decade - assuming that your colleagues continue to electrify at a reasonable rate - since the "main line" electrification of CP5 allows some good pockets of DMUs to be replaced by "secondary line" electrification in CP6/ CP7 (albeit I appreciate that a lot of the CP6 announcement will be "to do the bits of GWML/ MML/ TPML that we didn't have time to do in CP5").
We need a short term fix to get through the DMU shortages of the next five/ ten years (after which we should see wires at places like Salisbury/ Bradford Interchange/ Warrington Central/ Swinton South Yorkshire, and the bi-mode production line may have expanded into producing something less "high speed").
Since the PVR of "unelectrifiable" routes (like the Heart of Wales/ Kyle of Lochalsh) is pretty tiny, we've got thirty years before we need to worry about replacing DMUs on them (given the number of current DMUs capable of lasting until the 2040s - e.g. the 172s), so I don't think that we need to lumber ourselves with hundreds of new DMUs. We just need something to get through another decade - and if the 230s come at 25% of the cost and only last 25% as long then that's a fair trade off.
OK so the 230s provide a way of creating a cascade from the bottom. All this talk of 220-222s being available for cascade does not directly help the routes that Pacers and other older units run on (150s) - units with a 1/3 + 2/3 door spacing, higher acceleration and lower top speed. Granted the 220-222s could cause an indirect cascade via displaced 158/159s and 170s. But I do not think there is enough scope for these "intercity" units to really effect the other end of the market. I think it highly likely that the 220-222s will end up surplus while 150s are kept going well beyond their use by date. That is unless non-intercity (suburban) electrification really gets going.
Are the wrong trains being replaced with the current choices of electrification ?. For example would electrifying the Welsh valleys sooner obviate the need for more DMUs, including 230s ?. That is rather than electrifying the Midland mainline which is in danger of creating a surplus of the wrong kind of DMUs (222s) - thus meaning the 230s are still needed !. I know, I know, its a bit of a "making the solution fit the problem"

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In terms of "replacing 1980s DMUs", we are doing electrification the wrong way round. We'll free up modern stock like 185s and 222s without directly replacing many Pacers/ Sprinters (other than the Valley Lines).
I get why we need to focus on the "spine" (GWML/ MML etc) before we target the branches that Pacers/ Sprinters tend to be found on, but there's a limit to how we can cascade the 185s/ 222s down to "local" routes - which is why I think we need some "basic, bottom of the market" DMUs like 230s in the shortish term.
We've built lots of 100mph/ 125mph DMUs since privatisation that aren't suitable to replace 142s or 150s - cascades can only go so far - we need something to directly replace the Sprinters/ Pacers in the short term (but probably don't need that diesel capacity to be around by 2030).
Regarding the D78s and Vivarail. Is it actually a case of a good idea but wrong type of train to be going it with? If they had done it using existing heavy rail EMUs then some of the issues which have come up like 60mph top speed and non-standard length carriages wouldn't have occurred
If there were such redundant stock kicking around then I'd agree, but what have we withdrawn? Half a dozen 508s and a handful of front coaches from 460s (that are heavily cannabalised at Doncaster)?
I don't think that being limited to 60mph is as big an issue as some do - given how slow some services are - as long as the acceleration is decent.
I do think that, if the DfT had come up with this idea themselves, there'd have been a much better chance of 230s happening though.