One tenant leaving and the other staying - What to do with deposit and AST

Tax Planning and Financial

3 months into a 6 month tenancy agreement one of the two tenants has left. The other one wants to stay and she is willing to find a replacement for him. Obviously the one who has left is in breach of the contract so I'm not sure how to deal with the deposit (under the DPS scheme).

- Do I try to recover his half of the rent from the deposit?
- Do I need to bring the AST to an end and start a new one? or can I just document (maybe a letter) the fact that he has left and someone else is taking his place?

What is the best way to deal with this type of situation?

Thanks!