That's unfortunate, can you bulk it out with neighbours kids, siblings of confirmed attendees etc.
It is hard with parties, we don't have much family so have always felt compelled to host parties and have always been dependent on others bringing their kids along which I've been very appreciative of. It has however always been nerve wracking worrying if it's going to be low attendance.
I do think £1000 is a bit much though, we've always capped ours at £500 but that's for absolutely everything including the party and some small gifts from us, so normally split £400 party and £100 gifts from us.
Our last party we had entertainer £250, hall booking £70 and lots of McDonalds happy meals I think about £50. I pulled the reins in on party bags and this time did a themed sweet which I bought in bulk for £15. But in previous years I've spent more, but it is a waste.
If this is the first party for your first child I understand getting caught up in the excitement of it all and the budget blowing up like that. It can seem like all aspects are important.
After a few parties some things are no longer important, at the recent party I pondered over decorating the hall and decided not to bother which was the right decision as it saved money and kids didn't care as the entertainer made it special.
I would still have the party but if possible bulk out numbers a little bit. Parents will stay at that age too so that will help fill up space if you have booked a large venue.
Good luck on the day x