I'm a bit surprised by some of the replies. I feel for you OP. Yes he is very young, but it's totally natural and understandable to be worried if you're told your child is behind at any age. I totally understand where you're coming from with your concerns.
There's a lot to unpick here.
Some children do struggle to adapt to the level of independence needed to achieve in Year 1, so it is possible for a child to achieve the Early Learning Goals in Reception but begin to struggle more in Year 1. However, from what you've said, it is not really obvious exactly what he's struggling with.
Asking you to work on reading, when you perceive your son to be fluent on an average level of book for his age group, does seem quite vague and unhelpful. Could it be his comprehension which is holding him back? Is he able to talk about how characters are feeling and recall the main events of a story in order? Can he suggest reasons for his answers, supported by the text or visual clues? (eg knowing a character is sad because it says they 'sobbed', meaning they are crying. Or knowing a character is happy because they are smiling in the picture, even if there is no reference to this feeling in the text? Can he predict what the book might be about, based on the title and the picture on the front cover? Can he predict what might happen next, after a key part of the story?)
The worst thing you can do is compare to his peers so, as hard as it is, please don't waste your time and energy finding out how their parents evenings went and what level they're working at as they're all different. A child can, for example, be on an easier level of books because they struggle more with phonics or fluency, but have better comprehension skills than another child who is reading harder books. It's not healthy to dwell on the levels of other children in his class though, many if whom you admit are older anyway.
It's possible they have carried out some tests recently and used the data to inform their judgements. Some children struggle to understand tests at this age, or may be prone to rushing, meaning they don't perform to the best of their ability. If they have done some tests and have purely used the results to inform their judgements, rather than considering how the child genuinely performs in class, that could explain why his attainment levels have come out much lower than you were expecting. They're still very young. It's really not the best way to obtain data, but sadly that's school life in 2026 with many trusts insisting their young pupils are tested to secure data.
Another thing to consider is how they're assessing. Most schools have check points for 'on track' for secure for the end of the year. Do they just mean he's not yet achieved everything he needs to be 'secure' at the end of Year 1 (I wouldn't have expected him to yet), or do they mean he's not on track for it at all this year?
If I was you, I'd ask if you can arrange another short meeting to discuss a few things, now you've had time to digest what you were told at parents evening. Explain that you're surprised to hear how he"s now quite behind where he should be, given that he was fine in Reception and you had no reason to suspect he was struggling until now. Ask what he needs to be able to do in reading, writing and maths in order to be expected, and what the school are doing to support him. Find out what you can do to help him at home, asking them to be specific about what skills he needs to work on. Them simply asking you to work on reading at home, when clearly you already read daily, isn't particularly helpful. You need to know exactly what to focus on in order to help him improve. Is it comprehension? Is it phonic knowledge? (He may have some sound gaps to fill. Ask if he's on track to pass the phonics screening in June. If not, how can you help? What sounds is he struggling with?) Is it his sight word knowledge? You say he reads fluently, but maybe he doesn't know as many of the common exception words as they would expect him to at this stage.
You definitely need specifics to work on in order to help plug the gaps and get him back on track. It's definitely possible, as children can make giant leaps in attainment at this age, once things start clicking. Sometimes a small boost of an intervention at school and daily work on a certain skill at home is all that is needed to help get them back on track. Show the school that you are keen to work with them to ensure he catches up quickly.
Good luck