Singapore Grand Prix: Budget cap breach ‘speculation’ say Red Bull

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Red Bull have described as “speculation” claims they breached Formula 1’s budget cap last season.

Formula 1’s governing body is said to be preparing to announce that two teams, Red Bull and Aston Martin, exceeded last year’s $145m (£114m) cap.

Red Bull’s Christian Horner told BBC Sport it was “purely speculation”.

Aston Martin, the other team linked with a breach, said they were “in discussion with the FIA and awaiting certification”.

The FIA told the teams this week that they would be issuing compliance certificates with the 2021 financial regulations – or not – on 5 October.

A number of teams questioned, when approached by BBC Sport, why the process of ensuring compliance with the budget cap had taken so long.

The accusations, if proved to be true, risk exacerbating problems F1 has had with the credibility of the 2021 season and extending them into this year.

The claims relate to the 2021 season, when Red Bull’s Max Verstappen clinched his maiden title from Mercedes’ Lewis Hamilton after a controversial end to the season in which FIA race director Michael Masi failed to implement the rules correctly during a late safety-car period.

But the budget teams spend during a season also includes their development for the following year’s car, so any breach would have had an impact on a team’s performance in 2022.

And if a team is found in breach in 2021, it is likely to have an impact going forward – they are likely to have used the same methodology to assess costs and spending in 2022, so could be in breach this year, too; and this would have an impact on 2023 car development.

The budget cap was introduced as part of a swingeing set of regulation changes aimed at closing up the field and making the racing in F1 more competitive.

This year, Red Bull have dominated the season, helped by a series of errors and failures by Ferrari, and Max Verstappen is poised to clinch his second world title with several races to spare.

McLaren team principal Andreas Seidl said: “I don’t want to comment on specifics because I don’t have any information, but it is clear that in terms of the financial regulations, similar to the technical and sporting regulations, good governance and policing is in place because the integrity of the sport is the most important thing.

“We have a lot of faith in the new president of the FIA and his team, seeing the rigour with which they investigated the budget cap on our side.

“We trust them to make the right judgement.

“It is also important to have proper penalties in place so the cap works as intended.”

The cost-cap regulations define an overspend of less than 5% as “minor” and more than that as “material”.

Sanctions for a minor breach can include a decision of points for the championship in which the breach took place, a suspension from a limited number of events, limitations on research and development and a reduction of the cost cap.

For a material breach, the possibility of banning a team or driver from an entire championship is included.

Teams regard it as an open secret that there has been both a major and a minor breach, at least one having been given that information direct from the FIA.

However, there is no expectation within F1 that the results of last year’s championship will be changed. But there is serious concern among teams that the championship could be distorted by breaches of the budget cap.

Even a minor breach could give a team a significant advantage.

A 5% breach in 2021 would amount to an overspend of $7.25m.

This is in the region of a leading team’s annual spend on in-season development, so even a minor breach could amount to the equivalent of effectively an entire season’s development.

Another way of viewing the figure is that an extra $10m would allow a team to employ a further 100 people, based on a typical top team’s average salary figure.

The budget cap reduced to $140m in 2022 and is coming down to $135m in 2023. The exchange rate is fixed at $1.2961 to the pound – so the cap is not affected by the recent reduction in the value of sterling.