It doesn't seem there's a lot of info about this, but I have found a claim that a �10 note costs around 3p to make, probably due to the massive number in production.
Coins however can become a problem and although the Royal Mint won't say how much UK coins cost, there is a problem in America currently whereby the cost of producing the American Penny is getting very close to it's face value. Even UK coins could do that, except we make them from steel & brass, whereas the American ones are made from zinc.