I am so so very sorry you are still having these hassles. The reading assessment is very much a "game" situation sadly.
I like polarbear's suggestion of just hanging out at home with your two kids together. Do fun stuff together like bake, garden, walks, games, chess, the park, museums etc.
When she asks for things give it to her, and do a lot with your little one too.
I work from home (own business) and have all three boys at home with me. I find that we are all happier and more productive when I follow a true "follow the child" protocol with all my boys. Sometimes I have them all sitting at a table to do a craft / science project. Other times two will go play lego/duplo/computers/trampoline etc and I will do something with one of them.
Is it hard? sometimes
Is it fun? TOTALLY!
Is it easier than fighting with schools? Absolutely!
Is it worth it? Every single day yes yes yes! even on the days when I feel we get nothing right , I still feel grateful that we don't have to return to that awful situation. I am happier, my kids are happier, DH is happier - our marriage is better too.
All the best with your final decision, feel free to ask questions or bounce ideas here as you need to!
