Makes me even more glad I mainly work remotely and don't have to deal with this "not only do we own your soul during the day but you have to come and enjoy enforced fun as well" philosophy. Thankfully our Christmas gathering is going to involve an event during the day so we'll be in normal work clothes (Christmas jumpers have been mentioned but it's not mandatory) and we're all taking food in; we all live some distance from the central place of work and an evening do was voted down though the younger girls in HR seem to be madly supportive, so they're mainly the ones attending the "big" department event. But then they all live within 2-3 miles of the main workplace...
Having said that, it is great that your husband has been taken on permanently; and it would be nice if he is able to show willing, even if it's just for the starter and main course and a couple of drinks, and then maybe leave after that? At least the meal is being paid for mostly, so expenses are really: outfit (if needed), transport, and any drinks. If he drives, he can stick to soft drinks and ask for tap water; if that isn't an option, and it's possible to find the taxi and/or public transport funds, then a pre-ordered taxi at a certain time can be extremely helpful in getting out of things early, I've found, and buses/trains obviously run to timetables (mostly). Am I right in thinking you said you work shifts? Well, if he drives, you evidently need the car to get to work that night, don't you? And the children can't possibly be left alone, and babysitters are impossible to find where you are, so he needs to get back at a reasonable time... ;)
I don't know about where you are, but for outfits, a couple of our local charity shops often have £1 rails, with surprisingly good stuff on there (it's usually when they're trying to make space), would that be an option for a new shirt or sweater? He doesn't need new trousers as well, or new shoes, and the shirt can always be worn for work afterwards. If you go down the ebay route, then either BNWT or BNWOT (brand new with tags/brand new without tags) are good keywords to add, people sell off really good stuff all the time very cheaply. Though to be honest, with a couple of exceptions, I can barely remember what I've worn for previous work do's, let alone anyone else!
I have to say I also sympathise with the "doesn't do drunk people when sober" thing, my family can drink for England (and Scotland, Wales, AND all of Ireland), and I don't drink much at all, and it is one of the reasons I often make excuses not to attend family gatherings. If I'm going to poison myself, alcohol isn't the drug I'll choose, thanks...though these days, thankfully, there's always the, "Sorry I'm driving so I can't drink" response. ;)