Don't worry about it OP. IME of English schools, everyone seems obsessed with jumping hoops of literacy as early as possible, to the detriment of creative thinking, or a fluency in math.
If his school isn't focussed on reading, then it's no surprise he hasn't grasped it yet. It does not mean he won't be a fluent reader in a year or two, or able to string two words together in the future. It also does not mean he's below average intelligence.
If they step up the literacy teaching this year as you say, he'll grasp it in no time.
Fwiw, it's more important that he had fluency with numbers and concepts in math, such as spacial relations, pattern awareness, measurements and shapes, than reading in these early years.
It's better for his creative brain that he's not bogged down with literacy hoops / levels to jump.
Keep reading stories to him and ask him to imagine how the story might turn out.
I think the uk system of intense pressure to learn reading at an early age is uniquely bad. It sets in stone a self fulfilling prophecy about how a child perceives himself to be academically. I've heard children as young as five say they're "rubbish at something because they're only at level X" whereas in fact they're doing very well in difficult, competitive, pressurised, and judgemental circumstances NOT conducive to learning.
Many countries don't even think about teaching reading formally until a child is seven, and they have a lot more engineers and creative thinkers than the uk.
Keep reading to him, ask him to predict how a story might end, and keep pointing out shapes, size, volume, weight, speed, acceleration, patterns, and include math in play in day to day life, and he'll be more than ok.