I hesitate to step in to this heated debate but
I am a governor and a year 1 parent, (and a teacher in a former life)
Our school has pretty good record at teaching phonics, they do it well and reinforce it strongly all through reception and year 1. The classes have a phonics slot every day, and within that they do practise real and non real words.
They do a practice test in feb, just to see where the kids are. The kids don't know it as anything but a phonics practice session.
Our school has very high level of FSM and is in a deprived area, we consistently score 90% on phonics, as against national average of 69% (I think)
My youngest has done this intense phonic training, my two eldest did letters and sounds in a much more watered down way. They are all excellent readers and can all decode new words using a variety of skills, BUT my youngest, who is the only one who has done it in this depth and to this extent, is massively better at spelling. She uses phonic spelling patterns, and one of the interesting things to me is that English is actually much MORE phonetic than we think it is, because we don;t know our own phonics. My dh is not from UK and he often says, when helping dd2, he wishes he had been taught English phonic rules when he was learning English.
It is just a decoding test, but there is no reason why most kids shouldn't pass it, it really should only be 2-3 in a class that don't.