My friend did a mixed party for a 3 and 5 year old and it was fine.
I have held 2 birthday parties so far.
1 for 55 kids and 1 for 30 kids. Both were very chaotic. For the 55 kid one I had a bouncy castle (nightmare unless you can get an adult to man the bouncy castle at all times and make sure too many don't get on all at once. We actually had a nose bleed due to having too many on at once). I also had an animal man which was £90 for an hour (Fantastic, however I think 55 kids was too many. They lost interest because they were having to wait too long to get a turn at touching/holding an animal.)
For the 30 kid one we had a dance class party in a dance studio. This was £75 for an hour in the dance studio and an hour in the food area. My DS really enjoyed himself but a lot of the boys wouldn't join in because "dancing is for girls" A disco with a DJ probably would have been better.
Next year we plan to have a multi sports party. The local secondary school hires out it's school gym plus a room for food for £42.50 for 2 hours in the gym and 30 minutes in the food area. They provide the sports equipment so you can either do the games yourself or do what I will do which is hire a sports coach for £50. You can get 8 x medals for 99p in the 99p shop to give out at the end.
Our local leisure centre also does cheap parties, so it's worth looking at yours.
I also know of a DJ that does 2 hours for £50 and does a disco, bubble machine and party games.
Venues around here cost £20-£50 for church hall, community hall, school hall etc.
Also ask local dance instructors or zumbatomic teachers if they do parties. I looked into this and if I sorted my own venue they charged £25-£35 per hour.
Music Bugs (you have to arrange your own venue) - for up to 20 children - 30 minutes = £65, 45 minutes = £80 and 60 mins = £95.
However ask around as I found a self-employed lady who wasn't part of a franchise that did sessions very similar to Music Bugs and charges £30 per 30 mins for parties.
Private hire at a soft play near me is £100. It's double that at another local one, so try different ones.
Another idea for a cheap party I've had is a cooking party. If your venue has cooking facilities get them to make their own cookies/gingerbread and decorate them.
A big hit at both parties was hiring a mascot. We have had Mickey Mouse and Jake and the Neverland Pirates. It was £25 for 30 mins including a gift and the kids loved dancing with them each time.
If you plan to have a pinata (always a hit with kids) make sure they all line up to take their turn and stay in the line. I tried to do this but then all the kids got out of the line and crowded round the pinata. How we didn't have another accident I don't know and I felt it was quite dangerous. Also the kids were all fighting over the sweets so what I would do next time is put in 30 party bags closed with elastic bands with some sweets, 1 x punchball balloon and 1 x bottle of bubbles so there's one bag each rather than putting the sweets all in loose and some kids getting loads and others having none.
For decorations and plates, bowls, etc pound shop, 99p shop, Asda and Wilkos are really good. Don't bother with cups as you always get loads of spillages. Also so you don't get loads of wastage put the food out on the plates ready and give them out.
Sausages
Veggie fingers
Potato wedges
Cheesey nibbles
Raisins, grapes and strawberries
Aldi yoghurt tubes (9 x 40g for £1.19)
Malt loaf (50p per loaf in Asda - cut into 8)
Funkee Monkee cup drinks with straws
For dessert I always do:
Giant cookies
Birthday cake
Ice lollies (but only if you have a freezer to store them in obviously)
For pinata/party bags:
Bubbles (9 x tubs for £1 or 10 x bubble wands for £1 in Poundland)
Punch ball balloons - Play.com do 50 x punchball balloons for £4.02 with delivery
Glowsticks - 20 for £1 in Poundland
Sweets
An idea we have for a rainbow party next your is to make your own food rainbow. So we will go round and give each child some lettuce, cucumber, tomatoes, red peppers, yellow peppers, orange peppers, sausage slices, veggie fingers, red onion, purple lettuce, sour cream etc and they have to arrange it into a rainbow.