Gillespie spent 25 years in investment banking, including spells at Citi and Goldman Sachs, and will now be responsible for allocating government money to fund research on business and social issues.

He said: “This is a critical time to become involved with the ESRC. The cost of recession, both in financial and human terms, is huge. The UK social science research community must ask and answer the profound questions which can influence future policy in the public, private and voluntary sectors.”

Lord Mandelson praised Gillespie’s “experience across business, government and academia” and said: “The ESRC has a key role to play in meeting some of the big challenges our country faces – as a funder of both excellent and relevant social science research and high-quality postgraduate training.”

The ESRC is currently involved in what is claimed to be the largest social research study in the UK, Understanding Society. Forty thousand households will take part in the three-year study, which replaces the British Household Panel Survey.