kellamity, I feel for you because my DS is also Yr2 (very late summer born), struggling enormously with Reading, Writing & Numeracy. His graded assessments at the end of Yr1 were all P scores (ie he was below NC level). And yet he is an articulate, bright child verbally. School (good state school in Home Counties) provided a programme of support in Reception/Yr1 which was not really effective, apart from Reading Recovery. However due to his age he only got 8 weeks on this prior to end of term. Yr 2 has been more rigorous in terms of support (fab fab Yr 2 teacher, TA & SENCO) and there has been some progress (eg now Yellow 8 book band).
Previous posters mention confidence - my DS is very very aware that he is supported, "can't read", other children take over when they are working in pair etc. So I try to boost his confidence as best I can but I do find that vague praise isn't the right way to go. So we do proper jobs eg Christmas cards, birthday cards, thank you notes, shopping lists (chalk boards), menus for role play at home. If I see any interesting (and cheap!) stationery I buy it for him so we have pens, pads, note books all over the house, but DS likes writing in them. We have enough books at home to set up a library! Like your DS funnily enough DS seems to be an OK speller but I do take homework seriously and that is a regular weekly hw.
I have tried reading him chapter books and my DS really doesn't yet seem to have the concentration needed to get the book finished. We have been trying Roald Dahl and he mostly listens to those now on CD.
An aside: I do feel very passionately about summer children being allowed to delay a school year in England (if their parents feel it would be best). The pressure my now broken family has been under over the last 3 years is quite disgusting. Gove spoke to the Education Committee recently - I had tweeted, together with Bliss on this deferral issue. His reply was trite and unacceptable. Do look at it on the video - at about c. 1hr 28mins or in the minutes. If you don't agree with his attitude do please contact him. The more support this campaign gets the better.