Just two years after its introduction in F1, which took place in 2021 with the regulatory change and the global economic crisis due to the Covid-19 pandemic, the Budget Cap has already caused a lot of discussion.
What is the Budget Cap?
First of all, it is necessary to be aware of what this spending "ceiling" imposed on teams is.
The proposal was born after the crisis due to the Covid-19 pandemic, which, as in all sectors, has caused economic problems even within the circus.
The Budget Cap provides for a spending limit of 145 million dollars, per season, within which each team must evaluate the costs for the equipment, the components of the car, any unforeseen events and transport costs. They don't limit themselves then the expenses regarding: the salary of the pilots and some leading figures of the team, marketing and legal operations, licenses, registrations and the engines bound to ad hoc financial rules.
The purpose of the commission was to narrow as much as possible the disparities between the teams with more economic possibilities and those less well-off. We hoped for a double gain: I decrease the gap on the track and increase the show.
What went wrong?
The new economic directive arouses the first discontent, predictably, among the teams that boast greater economic opportunities such as: Red Bull, Ferrari and Mercedes. These in fact asked the FIA, even before the baptism of the newborn rule, an increase of 6 -7% of the expense cap. Increase promptly denied by the Federation, also given the firm opposition of: Haas, Alpine, Alfa Romeo and Williams.
However, the biggest controversy related to the Budget Cap comes in 2022, when two teams are suspected and then later found guilty to have exceeded the imposed limit. Red Bull and Aston Martin will both receive financial sanctions, 7 million dollars for the first, with 10% less time for aerodynamic tests and 450 dollars for the second.
What's happening now?
If in principle, probably also thanks to the coincidence of the new regulation, the Budget Cap seemed to have granted equal opportunities to all teams, to date it is clear that the gap has not been filled. It is true that the more affluent teams have not been able to spend disproportionate amounts of money, but it is equally true that the smaller teams have found their hands tied for the most important developments, those related to basic infrastructures.
To raise the problem is James vowles, new TP of Williams, who arrived at the team after more than a decade at Mercedes. Upon his arrival at the British stables Vowles was surprised, in negative, by the lack of some vital resources for an F1 team.
"There are some things that I consider fundamental, which are already present in other teams and have been for almost 15 years"he said.
The problem is therefore at the root: the teams that before the Budget Cap did not have some advanced structures, today cannot reach the "big" ones because they would find themselves having to choose between the development of the structures in the factory and performance updates on the track.
"I personally feel that if we want a meritocracy, we need to give my team the ability to catch up with some of the big teams and have the same resources." continued first man Williams.
How could the Budget Cap change?
The discussion currently concerns greater freedoms on capital expenditure, in fact a derogation for the development of wind tunnels has already been approved. But that's not enough, as Alpine director Otmar Szafnauer says:
“I think there are other infrastructures and tools under the tunnel that should be treated in the same way. Things like test beds, which big teams have and small teams don't”.
At the moment the FIA and the FOM seem open to a dialogue with the teams to modify some aspects of the Budget Cap, if six of current teams will support the changes we could see changes from 2024, if instead the teams that agree will be eight, the tweaks could be introduced as early as this year. Will an agreement be reached?
STATEMENTS SOURCE: MOTORSPORT.COM
