F1: Team bosses split on the idea of increasing the budget cap

Formula 1's team principals have had contrasting opinions on the idea of increasing the budget cap for this year. While bigger teams like Ferrari, Red Bull and Mercedes have called for an increase in the spending limit, smaller teams like Haas have refused, causing huge problems for the FIA.

Formula 1's governing body initially thought of introducing the budget cap this year alongside the new aerodynamic regulations, but in light of the Covid-19 pandemic, it was brought in a year early and the technical regulations were postponed to 2022.

The limit was initially set at $175 million but was reduced to $145 last year and was further brought down to $140 million this year, with a $5 million reduction planned for 2023. While the cost caps were introduced to bring equity among the teams, Ferrari, Red Bull and Mercedes have continued to dominate the sport due to their superior infrastructure.

Team principals of Red Bull and Ferrari, whose teams are currently in an intense battle for both Driver's and Constructor's championships, have been vocal about the need to adjust the budget cap in light of rising inflation in Europe.

Red Bull boss Christian Horner warned that it is impossible for his team to not breach the spending limit due to high energy costs due to the Russian-Ukraine war and interest rates financially weakening the team. He also stressed that several jobs could be at risk due to strict constraints on the budget, with the Milton Keynes-based team forced to release some of their staff last year due to budget constraints.

“We would have to miss numerous races to get anywhere near obviously getting costs under the cap. And I think certainly all the major teams are going to breach that 140 count this year.

“Now, what we don’t want to end up doing is, there’s a five percent threshold for a minor breach. What is the penalty for a minor breach? And what we don’t want to do is end up playing a game of chicken.

Ferrari boss Mattia Binotto said that the budget cap will lose its value if any team breaches it and urged the FIA to have a relook at the subject to satisfy all parties. When questioned about the implications of the cap, he said: “The most important is many teams will breach it.

“And that would be bad for the financial regulations, because if we come to the point that we are breaching the financial regulations then we will start debating the value of it. We will start debating if the financial regulations are worthwhile, is it working, and putting everything back in discussion.

“To avoid that, because it’s important to have a cap, I think the only way is to take some more time and try to do a better and proper job for next year and the following one.”

Meanwhile, Alipne's Team Principal Otmar Szafnauer claimed that teams should try to limit their development budgets to offset rises elsewhere. The former boss of Force India and Racing Point argued: “When freight costs go up by 2.5 million or 3.5 million but your development budget is 20 million, can you not make your development budget 17 million and still be under the cap? You can.”