I admit, it was news to me that kids in the UK see Santa, not at his Workshop, but in a "grotto": grottoes which, some quick googling showed, are not dark and cave-like, phew, but rather are Christmas-y settings with elves, bright lights, decorated trees, etc.
Apparently the tradition started in Adelaide, Australia, with a "Magic Cave" set up in a department store in 1896, and the practice caught on in British and North American stores. Nowadays, you can find a "Santa's Grotto" at most department stores and shopping centers in the UK. Kids queue up to see Santa and get a little gift. Grottos are not always free; some charge the equivalent of $5 or more (and presumably Father Christmas gives a nicer gift.)
Families willing to grab their winter coats and off-season airfares can have a wonderful London Christmas that includes holiday lights at famous sights, outdoor skating at several rinks, Winterfest in Hyde Park, carolling, Christmas markets, and generally a good chance to imagine you're back in Christmas Past where Scrooge and Bob Cratchit walked the Victorian-era streets. London also has a gigantic New Year's Day parade.
As for Santa's Grottos in London... At top spots, Father Christmas runs a well-organized operation: at Selfridges, for instance, Santa's Grotto is up and running in mid-November (starting with a parade), has its own Santa Express train, and visitors can book a time-slot online so they don't have to line up (-or rather, "queue"--) for hours on end. The Santa Express is free, but you'll pay £3 per booking (for up to four people); proceeds go to charity. Harrods and Hamley's offer pre-booking too. See more about Santa's Grottos in London.
