Popped over this afternoon to take a look and as suspected, this appears to be a case of shame on you Halfords.
I pressurised the cooling system to around 12 psi to mimic normal operating pressure and sure enough a fairly powerful pinhole jet of coolant began to spurt from the EGR area.
It was a short section rubber hose which connects one of the EGR coolant pipes to the main cooling system.
Excess movement of a ribbed fresh air intake pipe has resulted in it wearing through the coolant hose with a very noticeable gouge formed.
An unusual failure as the fresh air pipe is normally connected to a metal pipe section which in turn should be secured to the engine block with a bolt.
That bolt and bracket were still screwed into the engine but the bracket had sheared away from the pipe allowing the pipe to become loose and rub.
18 years of vibration and tired engine mounts have finally taken their toll.
Being Volvo, this 4 inches or so of rubber will cost around £25-30 but that should be the leak sorted.
A new EGR was 100% not required and Vida showed the EGR operation to be whilst not perfect, absolutely fine. A thorough clean will restore factory operation.
As I see it, Halfords would have got away with their blatant dishonesty by replacing the EGR cooler and the short rubber hose, curing the leak as requested and happily taken £800 for the privilege which is pretty unforgivable in anyone's book.
These are nice, genuine, honest and trusting people who deserve better.
I'll update the thread as things progress as we're looking at putting the money to things that will actually be beneficial to the running of an otherwise honest car with getting on for 240k on the clock.