Redundancy role being moved out of country- what are my options?

I have recently been notified about "potential" redundancy of my role.
Been with the employer for 5+ years.
I am the only one in this role in the UK & rest of the similar roles are outside UK.

Is it worth going through the redundancy consultation process, instead of upfront agreeing for early settlement?
Employer is throwing 3K (on top of mandatory statutory redundancy pay) to entice me into signing the settlement agreement for immediate exit.

Can I challenge the redundancy? If I propose say- a voluntary salary reduction / salary cut will it help?

Can I challenge the redundancy?

This depends on what you mean by "challenge" it. If you mean "persuade your employer that your role is not redundant and they should continue to employ you", then you can absolutely try that line if you want. Expect it to go nowhere though, your employer will just say something like "prevailing business conditions" which is essentially irrefutable.

You may be able to challenge the specific process being used; there are specific rules how redundancy works and if your employer does not follow them, then they are in breach of the law. However, even if they haven't followed the correct process, don't expect to keep your job: the overwhelmingly likely conclusion would be monetary compensation.

As noted on the gov.uk redundancy page, you should talk to ACAS or Citizens Advice.

Is it worth going through the redundancy consultation process, instead of upfront agreeing for early settlement?

Nobody except you can answer this; only you can decide what £3k and a lack of stress over the process is worth to you.