Damages during tenancy

Tenancy Deposits

We are managing agents and last year we had a student house from hell. They consistently caused damages which had to be repaired during the tenancy. Deposits were with Mydeposits. There is some confusion about how contractors are to be paid to do the repairs during the tenancy when strictly speaking deductions have to be agreed with the tenants at the end of the tenancy and they can then dispute this is if they wish.
The tenants obviously will not pay at the time the work is carried out,either because they have no money or just dont want to, and the landlord does not want to pay as we are holding the deposit, nor does he wish to lodge a sum of money with us with which to pay the contractors which can then be reimbursed from the deposit. What is the correct procedure?