Putting that lot together, I reckon that you can buy a decent camera for around �60, plus the cost of a decent SD card. Take a look at this Kodak model:
http://www.argos.co.uk/static/Product/zone/spe cialOfferZone/C$PROMOTION/1/partNumber/5606760 /Trail/zone%3DspecialOfferZone.Special+Offers% 3EC%24cip%3D1500006538.Photography%3EC%24cip%3 D1500006547.Digital%2Bcameras.htm
It's got a good specification for the price (including video with sound) and Kodak products usually have user manuals which are easy to understand.
The internal memory on that camera won't store many pictures but that's easily fixed by purchasing an SD card. (Don't buy from Argos, they're grossly over-priced). You can pick up a 1Gb or 2Gb card really cheaply online, e.g. here:
http://www.directfoto.co.uk/shop/category/Memo ry-Cards-Blank-Media.aspx?categoryid=38&Sort=F romPrice%20ASC&gclid=CPyemZ2mo44CFQMfEgoduHTrZ A
So, in total, you're looking at around �70. Actually, I'd suggest using up a little more of your budget to buy a couple of sets of nickel-metal-hydride batteries, and a charger. As you've probably discovered, digital cameras eat batteries!
Those are my first thoughts. If I spot a camera with an optical zoom better than 3x, I'll let you know.
Chris