Why aren't late night channels shut down, to make room for useful channels?

In short, there is no need to shut down late night television channels. For every late night channel there is another channel that broadcasts only during the day.

Freeview is organised into several 'multiplexes', which if ran efficiently would facilitate many channels, broadcasting over the same frequency at different times of the day.

For example, the new National Lottery television channel uses the same frequency as Film Four. So now you know late night channels aren't a waste of much demanded digital television spectrum.

Links
Freeview
Freeview Channels
Wikipedia: Freeview