Couldn't find any other citation of a billion-pound note, but million- and hundred million-pound notes apparently do exist. They're used internally, it seems for the special purpose of backing up Scottish and Northern Irish currency notes. A note isn't strictly speaking money, it's just the promise that you *have* the money. The Scottish and Irish notes hence need official backing, to ensure the banks that issue them actually have the money they say they do.
So it's a technical exercise, and then a million-pound note is a convenient way of achieving this (as opposed to 50,000 £20 notes).