You have completely misunderstood the UK market - note that the OP talked about London. Perhaps as a way to get past the recruiting problem, UK corporates pay a premium for exerienced programmers on the basis that if they cannot do the job, they are let go immediately without severance. Most contractors are 30+, don't want to be 'in charge' (at meetings, giving interviews, being trained in the latest corporate 'values') and are happy to be given a product to build or maintain.

Every contractor I know resigned from a permanent position in their early thirties to go contracting and make 1.5x-2x as much money as a contractor. Businesses regularly offer contractors full-time positions and are regularly turned down.

Contractors may not be particularly special technically, but they will focus on doing what they're told in the team and not attending training, seminars, workshops or HR meetings. I'd much rather build a product with a team of suitably incentivised and managed contractors than a team of permies.