In reply to Blue Straggler:
The most important thing is to make sure it's exactly the same as the previous one. The reason for this is that otherwise there will be significant fear, uncertainty and doubt which you will then have to deal with, and everyone will be unhappy. So resist the urge to get better software and improve things, where possible, as you are already suggesting in your post. Absolutely right with the Office decision you mention, could be worth checking to see if they have an install set for the version they are currently using which will work on the new machine.
I usually use Dell or PC World, but there are probably cheaper options and your budget seems more than adequate. PC World will do you a transfer of the old PC to the new, which saves you the hassle, and also may connect them with PC World support so they can go there instead of ringing you, etc.
Finally, remove the old machine and take it home with you, which will remove the temptation to keep using the old one and thus get them into all sorts of trouble because they forgot what was on which machine, etc.
Good luck.
Edit: I would advise against the refurb - good for you but might decrease their confidence and pride in shiny new PC etc.
Post edited at 14:28