So, having unsettled council tenants by threatening an end to lifetime tenancies, the government now plans to incentivize councils by offering them tax breaks for every council house they build. There's surely a much better way to ensure a larger supply of council homes - stop selling them!
If they want to incentivize council house tenants to buy a property, then give them the cash saving as a deposit for a home locally that's not owned by a social housing provider.
We have a chronic shortage of social housing largely because we've sold off so much of it since the right to buy was introduced in the mid-80s, a right that was not matched by a commitment to build. That legislation should have insisted that councils had to use the money raised by the sale of council houses to build more council houses. Instead, the legislation expressly ruled out using the cash raised to add to the housing stock.