Hi Harriebabe:
First off (and check out MN info on assessment & progressing through NC Levels here: www.mumsnet.com/learning/assessment/introduction) - but if your score NC L3 at end KS1 the expectation is you should achieve NC L5 by end KS2.
So in principle your DS is on track. Handedly so in Maths where he's 5b already, and getting there in English.
Moving down a group can be for all sorts of reasons -
separating friends that chat too much and don't pay attention
giving a struggling student more confidence
and
getting a struggling student into a group where he'll get more time/ attention on areas of weakness.
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What you should be doing.
Worry is good - it's very motivating - so don't be upsets to be worried or concerned. It shows you care and posting here shows you want to understand what this means and do more to help.
My advice would be talk to the teacher (see if you can catch them before breaking up for Christmas). Find out 2-3 things that you should be working on at home and focus on them.
Ensure that your DS is reading regularly - and some of the time to you.
Don't let him fudge it. If he doesn't know what a word means - have him guess by context or go and look it up. You don't just magically expand your vocabulary - you learn what words mean/ how they are used and then apply that knowledge.
If writing is the issue - I'm afraid there are no shortcuts - he'll need to work on it. Don't let him write briefly for homework - if he's ask to write on something - tell him you expect to see a full page or 3 paragraphs, etc...
If the issue is that he's chaotic in his writing - have him plan more - get a piece of scratch paper and plan out what he wants to say and then apply it.
If the rhythm of his writing is monotonous: I went to the .... I saw the.... I felt happy that .... I was...... I knew..... over and over - have him make it more exciting - have him re-write it:
Yesterday evenings, I went to the..... The ..... could be seen from miles away. I felt so happy that..... Perhaps, I was...... I always knew.....
(I play a game with DD1 where she writes a sentence about a character - say Harry Potter is a boy. (sadly a typical sentence for her in Y5) and then writes it again making it more interesting.
So Harry Potter is a boy
Harry Potter is a boy and a wizard
Harry Potter is an ordinary boy who also is a wizard.
Harry Potter seems an ordinary boy but, actually, he's an extraordinary wizard.
and so on....
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As I said worry is good - it's a great motivator. Know that he's perfectly o.k. for passing his SATs (NC L4 is the expected level of progress) - and what this is about is going for that higher level (NC Level 5) and securing those skills for work at senior school.
HTH