By colluding with the City in replacing an East End market with office blocks, London Guildhall University risks destroying a community, argues William Taylor.

After the talk, the tea, the custard creams, the coy jokes about adopting a "missionary position", there would be the inevitable furrowing of brows, the but seriously frown, followed by that awkward little question, "Tell me, brother, are you saved?" So easily asked, so wretchedly answered.

Eventually, not wishing to spend every Thursday evening as a student in Oxford debating the finer points of the doctrine of regeneration, I stopped going to these Christian Union meetings. I probably realised I was never going to cut the mustard anyway. Besides, I had by then discovered incense and holy water stoups and other such delights up the road at Pusey House, the engine-room of Anglo-Catholicism.

Things moved on: 15 years later I am preparing to welcome a new intake of students at London Guildhall University, where I work as the Anglican chaplain, alongside my Free Church and Roman Catholic colleagues. Some of the new arrivals will make their own way to the chaplaincy suite - we have no chapel, but borrow a local church for our assorted liturgies and mysteries - where we offer exquisite wholemeal biscuits and organic Fairtrade coffee and our fridge is stocked with lightly carbonated mineral water. We have low-level lighting in the chaplaincy and allow our visitors to lurk in the shadows if they wish. We do not inquire as to their ultimate destination (up or down?), not on the first visit anyway. We are a motley lot, but try to function as a hospitable community, a loose confederation of fellow-travellers and the passing curious.

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Working with our colleagues in the department for student affairs, the chaplaincy is part of the pastoral provision of the university. This means that, aside from the time we spend together as part of the Christian community, we work with the university in its strategic mission to serve its various constituent communities.

Last year, with some assistance from the health charity, the King's Fund, we helped to run an oral history unit for some students from our communications department, who set about interviewing the clients at the homelessness project of nearby St Botolph's church in Aldgate. It worked well precisely because the students felt involved with the concerns of their assignment: when they had completed their interviews, a number continued to work as volunteers for the project.

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Next year, along with the East London Mosque, we will run a course that explores the place of belief in notions of citizenship - how, from our different religious traditions, we might be able to stake out some shared territory for the "common good". Again, success will depend on an understanding of what it means to be good neighbours.

Pastoral work is personal; it is also political, concerned with helping to dismantle structures of inequality, identify systematic exclusion, broker investment in social capital.

Much of what LGU is about is, indeed, determined by its location. Spread out across the City (Moorgate, Tower Hill, Aldgate) and the foothills of East London (Shoreditch, Spitalfields, Whitechapel) we straddle two very different worlds and seek to be a bridge between them. We inhabit a zone of transition and wish also to function as one.

Of course we draw students from all over the world, offering a number of specialist degrees, but we also present opportunities to those who would previously have packed their textbooks away at 18 or earlier. Through our outreach programmes and summer schools, student ambassador and mentoring schemes, community networking partnerships, flexible and vocational courses with their emphasis on transferable skills and work experience, we reach the individuals that many other universities cannot reach. In communities all over inner London we are an agent provocateur for aspiration.

Forty-five per cent of our full-time undergraduate population is mature (16th highest in the UK of 174 universities and colleges). Excluding "not knowns", nearly 55 per cent of our students come from social classes IIIn to V, compared with a national average of 41 per cent (again 16th highest). Most significant for us given our location in East London, as a percentage of all UK-domiciled students, almost 45 per cent are non-Caucasian, which is per cent more than would be expected given the university's subject mix. We are an open university and, in much of our core business, we are a local university.

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Of course, this is all good, but is it enough? Like quoting chapter and verse, citing statistics is rather a bullying form of evangelism. It tells a story, but it tells it baldly.

This was brought into focus for me recently by talking to a mature student, Ian (49), who is presently passing through the zone of transition that is LGU - only in his case he is moving out of the City of London and into the East End. Having left school at 14, followed by a period in the Royal Navy, he worked in the City as an investment broker, very successfully, until alcoholism unravelled his life and ambitions. Now he looks back on his time in the money markets with some dismay. "We would claim in the City that we were generating capital for new companies, when in fact we were doing nothing of the sort. We said we were concerned about regenerating poor communities, such as the Isle of Dogs, which we knew was just a joke. It was only ever a case of money chasing money."

There is a warning to be heeded here, not least because, with pots of eurodosh swirling around this reach of East London, the university is seeking to be an active partner in local projects of "regeneration". Since 1997, LgU has constructed a multimedia centre in Shoreditch (Silicon Ditch?), it has developed a centre for silversmithing and jewellery in Whitechapel, and is completing the Library for Women off Petticoat Lane.

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Our senior managers, moreover, are involved in a range of London-wide and sub-regional economic development agencies. Deian Hopkin, our vice-provost, chairs Cityside Regeneration Ltd, an economic regeneration agency with more than Pounds 36 million of government funding, set up to "bring success to Spitalfields" and west Tower Hamlets. Part of the matchfunding for this agency comes from the City Corporation's developer of Spitalfields Market. This money was paid into a community development trust as a condition of planning permission to redevelop Spitalfields Market as half a million square feet of offices. Judith Mayhew, chairwoman of the City Corporation's policy and resources committee, astonishingly describes this expansion of the City eastwards as "the final phase of regeneration of Old Spitalfields Market".

Excuse me, sister?

Now, although it was never really my thing, I do remember enough of those Christian Union conversations in Oxford to know that, in my faith tradition, "regeneration" is not about capital building programmes. When St Paul is banging on about the need to build on firm foundations (I Corinthians 3, 11), he is not talking office redevelopment proposals, matchfunding agreements and section 106 planning gain packages. His concern is to promote a new relationship with God and one another, rooted in the transforming grace of judgement and forgiveness, a vision of interdependence born of the recognition that we belong to one another. Of course, when you suggest this in polite company it is assumed that you are simply one added-value-partnership short of a bidding round.

There is a more general point. Universities, it seems to me, like the church and the mosque, should be necessarily concerned with questioning the bottom-line logic of the free market, encouraging the principles of association, focusing on long-term outcomes rather than short-term outputs.

Strategically placed, often in urban areas in desperate need of stable and hospitable institutions, we should be working together to promote diverse and sustainable cities in which our students (and congregations) may recognise their responsibilities as citizens. We should not be colluding with powerful interest groups in an impoverished, narrowly economic understanding of regeneration. Unless we are actively seeking to raise our students' capacity to work for the common good, we will end up functioning simply as zones of confusion rather than zones of transition. And there would be no salvation there.

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William Taylor is chaplain of London Guildhall University and a leading figure in the Spitalfields Market Under Threat campaign: smut.org.co.uk. He will read from his book This Bright Field (Methuen, Pounds 15.99) at the Museum of London on September 19 at 1pm.