Unprotected deposit

Tenancy Deposits

My tenant moved in back in Oct-15 and gave notice to vacate in Nov-21. I used an estate agent to find the tenant and the agreement was renewed once in 2018. It has recently come to light that the agent received a deposit from the tenant but failed to protect it or issue the prescribed information. The deposit has now been protected by the agent. However, the tenant has not paid the final months rent and has made it clear that he is aware that he may eligible for compensation.

What are my options?
Can I insist that the final months rent is deducted from the deposit?
If all or part of the deposit is returned to the tenant, can I ask him to sign a disclaimer to confirm that no action will be taken against me with regards to the deposit? If so, are there any templates available which I may use or should I ask a Solicitor to draft something?

Thanks