The programme was launched before the 1992 general election with three-year funding for 20 urban local education authorities by former Education Secretary Kenneth Clarke.
Local authorities have been able to bid to continue the scheme through a Department of Environment fund, but eight have lost out, and will either have to find the money from their own budgets, other sources, or close it down. Islington, for example, expects to replace the scheme with a Pounds 250, 000 literacy initiative in September.
Research commissioned by the School Curriculum and Assessment Authority showed that a year after their Reading Recovery help, socially disadvantaged children held their place in the class, says Professor Kathy Sylva, one of the report's authors. Poor children still did not catch up to their wealthy peers, but "usually over time, the gap widens", she explained. Professor Sylva and Dr Jane Hurry looked at 400 children from seven local authorities in their two-year study. Half were on either Reading Recovery or Phonological Intervention programmes and half got the normal school provision for poor readers. The study, conducted by the Thomas Coram Research Unit, showed that Reading Recovery was more effective than traditional methods of helping children with reading difficulties. Although a control group of children was withdrawn from class for special help for the full two years of the study, the gap between rich and poor continued to grow.
Phonological Intervention, which works on sound-letter relationships, also brought significant improvements but was less effective than Reading Recovery and did not narrow the gap between rich and poor children.
Reading Recovery, developed by Dame Marie Clay in New Zealand, requires a year of training for each teacher involved, and provides help with a broad range of skills to the four worst readers in each class of six-year-olds.
The research also shows that while Reading Recovery is expensive, it provides value for money. But the doubts raised about the effectiveness of the type of help that children with literacy problems normally receive will worry many.
"There was no evidence that the amount of specialised help in either year was significantly related to children's reading progress," says the report of the control group's progress. "This is not to say that children in the control group did not benefit from specialised tuition: some may have made additional gains, some may have fallen back. But, although specialised help differed greatly between schools, the composite picture is not encouraging."
Reading Recovery has been criticised for its cost, but, says Professor Sylva: "It's unwise to compare Reading Recovery with no expense. You must compare it to a cumulative expense in the control group which was not related to children's progress."
The Reading Recovery group made 25 months' progress in their reading age over a 20-month period, compared to 19 months' progress in the control group, despite 21.5 minutes weekly specialised individual help over two years.
The report says, "We could measure no gain in reading that could be attributed to the expenditure of the Pounds 573 per control child, using either their gain in reading age as compared with the standardised scores, nor any extra gain for larger amounts of specialised help." Each Reading Recovery child cost Pounds 1,030 over two years. David Blunkett, the shadow education secretary, accused Education Secretary Gillian Shephard of presiding over lower literacy standards as ministers abandoned a successful programme. He said: "This report should force ministers to rethink their short-term approach to this excellent scheme."
The Department for Education said it would evaluate all 20 schemes once the pilot concluded and would "look at ways of disseminating what Reading Recovery offers". They said 12 of the original 20 authorities had received funding under the Single Regeneration Budget, as well as two new LEAs. The Government had given no undertaking to fund a national scheme. "We don't advocate one method or another."
This indicates a change in policy since June 1993 when John Patten, then Education Secretary, said in the light of the three-year trial's findings: "We shall consider whether there may be scope to develop the programme. I believe it is a scheme with great potential for those experiencing most difficulties in their first years at school."
Angela Hobsbaum of the Reading Recovery National Network at the University of London's Institute of Education said preparing a statement of special need - before the child received any help - cost as much as Reading Recovery.
Expansion of the programme was jeopardised because of the lack of earmarked funding backed by long-term planning, she said.
The national training and co-ordination centre for Reading Recovery at the Institute is also under threat. Its funding runs out in August, and the only way to sustain it may be through contributions from hard-pressed local authorities.