Think the main reason is because real estate is incredibly expensive now. To run some kind of social space and make it financially viable you need to be collecting a significant amount to pay rent and wages.
Only way I can see it working is if the government pays for social spaces. An extension of the library system but more focused on events and socialising rather than being a quiet space for reading.
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.
Only way I can see it working is if the government pays for social spaces. An extension of the library system but more focused on events and socialising rather than being a quiet space for reading.