Spotify will cache (temporarily store) content in its internal storage, so that if you want to listen to it again for example, it can play locally from your phone rather than needing to redownload content which saves bandwidth/data usage - this does use up some storage space.
As outlined on this help page, ignoring the bit about stored playlists (which is offline playlists with premium), Spotify should release the space if needed by another application.
In attempt to remedy limited storage size, ios will delete files marked as unneccessary when it is in need of space. And spotify follows it. If you do need to delete cache you have to reinstall the app.