I know they're taught in that way, because ds2 has brought home COUNTLESS sheets that we've dutifully filled in(!) - I also know that ds2 is very very observant about quirky spellings - this may be atypical, but that's why I think the inflexibility of the test may be a problem. Even the teaching of a-e sounding 'ai' and o-e sounding 'oh' doesn't always work, because of 'have' and 'none'.
I am coming more and more to the conclusion that the best way to ensure children are not failed in learning to read is to start them later. I'm not sure where this compulsion that by age 6 you MUST know all the phonic sounds comes from - we are one of the only countries to start teaching kids to read at this age, and I have seen children in all my children's classes struggle, whether taught on mixed methods, or with pure unadulterated phonics, usually summer-born boys. I see other children in my family who live overseas who at age 6 haven't BEGUN to read, and statistically by 11, the children in these countries have overtaken the UK.
I also see this phenomenon in my own teaching - starting early doesn't equate to getting further on faster - in fact for most children (there are exceptions obviously, and you have to be able to spot these), they are at the same stage by 11 or 12 whether they've started at 5 or 8, but the ones starting at 8 haven't had the years of slow progress which can be frustrating.