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Budget cap set for 2009 introduction

A budget cap is to be introduced in Formula One from the start of 2009, FIA president Max Mosley has confirmed.

In a letter sent this week to all 11 team bosses, Mosley outlines that plans for a budget cap are to now be put in motion after the idea received widespread support in a meeting in Paris last week.

Mosley outlines details of the budget cap plans in the letter, a copy of which has been seen by, and confirms that areas falling outside the budget cap are engine costs, marketing and promotion, plus team principals' wages.

"Starting in 2009, there will be a cap on expenditure for all Formula One costs other than engines (as to which, see above), drivers and expenditure exclusively for promotion and marketing," wrote Mosley in the letter.

"Because of the variety of arrangements, particularly shareholdings, team principals' remuneration will not be included in the cap."

A meeting between FIA technical advisor Tony Purnell and financial representatives of the teams will be held in Paris on January 31, after which the FIA hopes to set the budget cap figure for 2009, and possible 2010 and 2011 as well.

A Financial Working Group is also to be set up to try and finalise regulations before June 2008. Should sufficient progress about the move not be made by that date, then Mosley warns that more radical cost-cutting measures, like wind tunnel bans, will be introduced instead.

"If the Financial Working Group are unable to devise a satisfactory method of checking expenditure or if a majority of the competing teams do not agree the proposals by 30 June 2008, the cost reduction measures voted by the World Motor Sport Council on 7 December 2007 will be adopted for 2009 in their entirety," added Mosley.

The idea of budget caps has received widespread support among team bosses, who are keen to bring down costs in the sport.

BMW motorsport director Mario Theissen said at the launch of his team's new car earlier this week: "Cost reduction certainly is desirable, we support that and have always supported that, and the idea of a budget cap I think it looks at a first glance quite attractive.

"We should at least spend some time on evaluating how it could work - what would be the cap, what would be included and how to police it. I would certainly prefer a budget cap over a limitation in specific areas."

The Mosley letter also outlines plans for future engine regulations, with the teams having agreed on a five-year engine freeze from 2008 to 2012.

No work on the current 2.4-litre V8 engines will be allowed in that period, although work on what power-unit will replace it from 2013 will begin within the next 12 months.

The FIA, along with the manufacturers currently involved in F1, hope to agree on objectives for the new engines by January 1, 2009, with detailed regulations for the lost-cost, environmentally friendly power units published on June 30, 2010.

No work on the new engines will be allowed before that date, and a budget cap for developing it will also be set. Further limits will be set on an engine manufacturers' costs for a season and the amount they can charge for customer power-units.

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