Replace the handbrake cables and sleeves (all one part), these crack and split, get clogged up and become restrictive.
Low 20s mpg, I would be looking elsewhere for faults also,
any Codes?
Check vac/boost pipework, check valves, hose clips for leaks etc.
How far and how are you driving it and getting these figures?
If you drive three miles to work on back lanes it will differ massively compared to if you travel 100m a day on motorways.
If the brakes were binding that hard there would be some serious heat build up!
