My system is configured to use UK English, dates, currencies as default. In
Excel 2003 I have no difficulty entering values with GB £ sign, but using
pre-formatted "Expense Statement" template, it refuses to do so and keeps
changing the sign to US $. Cannot find solution, but know it can be done. Can
anyone advise please? TIA.

Unfortunately Microsoft seem to have never noticed that some of the
English-speaking world aren't American* and a consequence of this is that
little or no thought is ever given to localisation**. What we get in the UK
is exactly the same version of Office as you get in the US, right down to a
shipped template that has locked cells formatted in dollars.
However, you can get a version of that template formatted in pounds:
Do file new, and click on "templates on Office online" from the task pane.
This will open the "Micrsoft Office Templates Home Page" in your browser.
Under "browse templates", select "Accounting and Reporting" which under
"Finance and Accounting" .
In the following list, you will find an identical "expense statement"
template, which uses pounds.

* Hint: English-England - there's a clue in there
** How quaint I am spelling that with an 's'