Hi -
Just looked at your 'profile' and see you are in France. Are you French, and why will the children be learning to read and write in English - or will they learn French as well?
I was a male Teaching Assistant (TA) in primary schools for over twenty years. English is a difficult language, and I believe French is possibly more logical and straightforward (though I never got far in French at secondary school, but I was probably just lazy!)
'Phonics' has been used in UK schools for eight years now I think, and if it is taught properly and well, it is very good and has successful results. Unfortunately, many schools are still not teaching it well enough, and combine it with 'old fashioned' methods, so for some children it ends up being a confusing mixture of methods. Also, because money is not available for the latest books, which SHOULD be phonically de-codeable, books that are 20 or 30 years old are still being used!
Re your nephew: he is very clever, and correct in a way, because in English his 'bloo' does have exactly the same sound as 'blue'. As children progress with Phonics, they should be taught how a sound can be represented by several different combinations of letters. The opposite can also be true, and a group of letters may be pronounced in several different ways. This is what makes it difficult and confusing for children (and many adults) and perhaps that is where French seems more sensible.
So, to answer your question: No, children that are taught Phonics correctly should have all the necessary skills, to be able to spell accurately. If they are taught the 'rules' to follow, as well as the exceptions that occur, they should do all right.
If you read some of the 'posts' on MN on Phonics, particularly advice from 'mrz', who is probably our most experienced teacher, you should get to understand it OK. If you have any other particular questions, come back to me, as a PM if you wish. Meanwhile, I'll try and 'keep an eye' on you, and give support where I can.
Good luck.