Capitalisation of GRIP stages 1-3

The LEP I work with has offered a grant from it's capital funds to complete GRIP 1-3 and identify the preferred option for station improvements.

In short:
This has presumably come up before so does anyone have experience with this and have other LA's capitalised these costs or not?

Details below.

The grant conditions include a provision relating to capitalisation of revenue funds which states that, if the project does not go ahead, the LEP will have to refund the grant amount into it's capital funds from it's revenue.

The descriptions of GRIP 1-3 on Network rail's site reads very similarly to P17 of CIPFA's practitioners guide to capital finance in Loc. Gov 2012 where it states that expenditure leading up to a decision about whether to do works cannot be capitalised as it is not essential for securing the particular outcomes.