If your daughter is not able to say the sounds automatically of the letter/s-sound correspondences introduced in the school's phonics programme, then she will not be able to blend well.
Also, if she cannot blend simple words consisting of the letter/s-sound correspondences she knows, then she is not ready for reading books of the type which are more 'look and say' and 'repetitive and predictable text'.
You don't mention your daughter's school's systematic phonics programme, is there one that you know of?
Has your daughter's teacher ever sent home a 'sounds book' with letters to learn (see the letter/s, say the sound/s)?
The first decoding of a beginner should be the decoding of single letters and then letter groups - and the first 'reading' should be reading of cumulative, decodable words.
Unfortunately, not all schools are properly on board with good synthetic phonics type teaching - nor do they necessarily go through the steps of 'sounds books' and 'word decoding' before giving out reading books.
Some children can struggle along with early reading books of any description - but many children can't.
It sounds from the OP's comments that mum may not have much information about the school's approach to phonics teaching. Is this the case?
In which case, mum needs to talk to her daughter's teacher about this and discuss this issue of her DD not being able to read the books being sent home and clearly feeling like a failure already. This is not acceptable.
Be brave - and do some finding out - and alert the teacher to your worries. Teachers and parents are supposed to 'work in partnership' but this does not seem to be the case in this instance.