How far behind is your DD?
'Working Towards' could indicate only mildly behind within a single year group, which is well within the normal variability within a year group - so pretty much any mixed ability class in a normal state school will have a group of children at 'Working Towards'. It will also have a group exceeding, and a group broadly meeting the expected level.
On the other hand, the vast majority of primary classrooms will have children who are very significantly behind due to significant SEN - so for example in Year 5 but working at perhaps a a Year 1 or year 2 level.
Which group would your DD fit into? The 'working towards' group that is somewhat below age related expectations but not many years development behind, or is she working 3-4 years below her chronological age?
If she is 3-4 years + behind, then yes, there might be an argument made for her repeating a year. The move down could be permanent, but IME the children this applies to are often considered for special school (or mainstream + specialist unit) entry at secondary transition.
If she is working towards the current year group expectations but not so severely below, then tbh your best option for accelerated progress is to leave her exactly where she is. Where i work, and I am sure it is pretty much universal, we work exceptionally hard with the 'Working Towards' children in the hope of moving them into the 'Expected' band by the end of the year. We don't neglect anyone else, but that is the group we are seeking to accelerate the most.
ANY classroom contains a proportion of children 'working towards', so that in itself is not a marker for moving down a year. Significant SEN leading to a very very large learning gap between her and her age peers might be, under certain circumstances, but it remains rare.