Have a look at Tesco, they use the o2 network. You will get a half decent phone for a tenner a month. The downside is the 24 month contract.
http://shop.tescomobi.../wildfire+s?deal=6839
As deggers has already stated GiffGaff do a good sim only deal wherby your texts and data are unlimited. Your minutes are governed by the amount you want to spend per month. They also use the o2 network, all you need is a smart phone off ebay which is either on o2 or unlocked.
I'd say this is the smart way to go rather than getting tied in for 24 months.