Dividends incur dividend tax which means between corporation tax, and income tax the contractor will pay roughly the same as someone on PAYE + NI

What dividends escape is Employers NI and that's where contractors make a gain

Coupled with the ability to have a spouse as a director or shareholder and so income split with them

That might be true but they still attract capital gains tax and corporation tax.

Then there's all the other expenses of running a business such as accountancy fees, public liability and on going indemnity insurance premiums and business banking fees that an employee won't have to pay on their salary.