I'm not great at numbers, but if most children failed the pilot phonics screening check yet most children learn to read, that ought to tell us that the problem is the test and not the children.
The problem could be how the test is designed, it could be what is being tested, it could be what is being taught which is then tested - or all three.
But it can't be the children because we can predict that whatever methods teachers use, most of the children will or would learn to read.