I think the point is that a ild can read and should be encouraged to read whatever they want outside of the reading scheme in their own time.
They become "free readers" when they read the last book on the reading scheme which their particular school dictates, and therefore there is no one fits all criteria.
There is no standard rule and we as parents and our children should not be bound by "THE reading scheme". Sure I think a parent has a duty to encourage their children to read the book dictated by their teacher (with challenge to the teacher if truely necessary). But I don't think that parents or children should be constrained by the reading scheme.
My DD3 - Yr1, blue books, ORT stage 4 happily reads her reading scheme book (ORT). She also gets a book out of "a suitable box" each week - which as far as I can see are just "out of date" (in the sense that the school don't use that particular reading scheme any more...I am seeing Ginn books whcih I can remember reading
) books from the same reading band. In addition she will apparently get a "free choice" from the KS1 library which "may be something for parents to share with their children rather than the child reading to you".
So in effect she gets 3 books per week. 2 from the appropriate book band, one of which will be from THE reading scheme. The third is likely to be for me to read to/with her (but I haven't seen this yet). This seems a good balance between the constraints of a potentially dictatorial reading scheme and free choice.
Oh and if that isn't too much for her she will also get to choose from local library which I will guide based on hter reading level but with 3 books a week from school there will be no pressure to read them and we will see how she settles.