sorry but I think that sounds a reasonable price for the main May half term week. the only cheaper alternative than that is going to be camping where you try and find a busy site with lots on. its the joys of kids and school hols. You might find that both Easter which is late this year or October half term are a lot cheaper. you wont necessarily have the weather but if there is lots to do it might not matter so much.
Gulliver's Kingdom/World whatever it's called in Matlock. It's perfect for kids of those ages and then you have the Heights of Abraham, Bakewell etc to explore as well. They do accomodation there now as well but no idea on prices for that.