>Only way I can see it working is if the government pays for social spaces.

The government effectively does financially support social clubs by exempting them from taxes: https://www.irs.gov/charities-non-profits/other-non-profits/...

Actively providing money to clubs would be a tough sell. Grant writing is hard, grant reviewing and auditing is expensive, and there could be a PR nightmare if the government provided money to an "immoral" club or didn't provide money to certain classes of clubs.

I don’t think it would be terribly controversial for councils and local government to just have a building somewhat like a community hall and just let people rent it out for very cheap for whatever social or club events they want.