From what I remember he has already skipped a grade right? So he is already a year younger than his peers.
The teachers always tell you that the Algebra I class is a rigorous class and try and scare you. I think you and your son need to decide if he wants to spend the summer working on the gaps, and get to be in Algebra next year. You need buy in from him. My guess is you can tell the school you want to do the Algebra class, but if the summer tutoring doesn't work out. That you can switch back to the lower 7/8th grade class. It's usually easier to move to a lower level that get pushed up higher.