This is so shocking to read.
This is not him "transferring you money for bills". This is him financially abusing you by forcing the children's DLA money to be used for basic household expenses that should be coming out of his wages.
You need to contact Women's Aid, attend their meetings. If you have a DD over 14 she can attend too. He is very abusive and you just can't see it. Your idea of what normal behaviour is, is very very skewed.
When he does the weaponized incompetence thing when left to look after DC. That's not because he finds looking after them difficult. It's because he is using that tactic of weaponized incompetence to coercively control you. He is deliberately creating a situation where you are tied to the house/DC and can't work because of it.
Whenever you alter the ordinary, normal, reasonable behaviour that you would do, if you were able to, and swap that behaviour for a different behaviour because you're worried about the consequences of you don't, this is because you're being coercively controlled.
You could buy the passport out of the DLA then tell him to pay the electric bill this quarter because you're out of money, there's nothing wrong with that. But you won't do it because he'd kick off in some way. Blaming you for "wasting money", causing a row, sulking, silent treatment, expecting you to apologise and "make it up to him" as if you'd done something wrong and out of order, calling you names for disagreeing with his perspective and not doing what he wanted, letting the electric run out or be cut off to "teach you a lesson", etc etc etc. You won't do anything without his permission because you're scared of the consequences, because it's "easier" to comply with what he wants. You are being coercively controlled.
You say big decisions are joint, they aren't. He doesn't take your needs into account and you fully admit he has the final say. That's not joint decision making. These also aren't big purchases. These are ordinary small purchases. You literally have no spending money other than that needed to pay bills and buy food. This isn't because there's no spare money, it's because he's hoarding it all for himself. You are only allowed to have anything else if he approves it. That's financial control and it means you're in an abusive relationship.
As a bare minimum, contact the DWP to get Child Benefit, DLA and Carer's Allowance all paid directly from the government into your own bank account. Not into his account then transferred to you by him.
DLA is not "your income", it's money for disability related extras for DC. In a family in poverty this may include purchasing the ordinary family food shop (as opposed to special-needs foods) etc but you're family is not in poverty and the family food shop, utility bills, personal travel and other ordinary child related expenses should all be coming from his wages not from the DLA. He is deliberately putting you into a situation of poverty in order to control you.
Regarding passports it isn't that he doesn't understand the impact this has on you all. It's that he doesn't care. There's no words you can say that will ever make him understand. He already understands, he just doesn't care. Your needs aren't important to him, DC needs aren't important to him. All that matters to him is being in control.