Has F1 already grown tired of spending constraints?

Much guff has been spouted over the matter of F1’s budget cap but now, perhaps, the subject has finally crossed the Rubicon (some might even say it has long since jumped the shark, if such a ghastly collision of cultural-aquatic metaphors were permissible in these pages). Even McLaren, the team which squawked longest and loudest for the cap to be set as low as possible, has now fallen in line with rivals and publicly capitulated to the inevitability of breaking it.

“We are at a position where we can’t make the cap anymore,” team principal Andreas Seidl told reporters at the Azerbaijan Grand Prix.

Budgetary pressures have subsequently pushed McLaren to “pull the handbrake” on car development (according to Seidl), although that doesn’t actually mean the technical team has downed tools (according to technical director James Key). What is this? Schrodinger’s handbrake?

F1 is an expensive business. This is a known. It is hardly the most extraordinary revelation since Archimedes realised his bath was too hot.

For many years the costs of taking part have been a given – and, indeed, blithely ignored by those few teams privileged enough to not require constant vigilance over the P&L. Freedom to spend has long been enshrined as an entitlement by competitors, and any attempt to constrain this profligacy has been met with fire and fury – and no small amount of spurious cant.

We now take for granted that drivers are penalised for using more than three engines per year, whereas when Max Mosley first pushed through measures to make engines last a full weekend, let alone more than one, he was met with pettifogging objections such as “But we always change engines on a Saturday night.”

The latest restrictions have also largely put an end to another venerable F1 tradition, that of team members having to carry development kit in their luggage. When Baku hosted its first grand  prix the staff of GP Racing were amused to note Toro Rosso boss Franz Tost pacing the arrivals hall in mounting angst when the baggage carousel failed to disgorge his chattels, which included several new components along with his undergarments and such.

After pushing hard for an F1 team budget cap, McLaren has found itself struggling to meet the limit

Photo by: Steven Tee / Motorsport Images

Has the cap proved too abrupt for some teams with a spending habit? Already we’ve heard considerable innuendo regarding Red Bull’s ability to bring so many developments to its 2022 car. For an outfit with form in rapid development – even introducing what amounted to mid-season B-spec cars in recent years – the team must have found the budget cap a culture shock. Little wonder team principal Christian Horner floated the apocalypse scenario of teams being forced to miss races later in the year if the cap isn’t raised.

A rapid inflation in costs has made this adjustment process even more difficult. After considerable lobbying, briefing and counter-briefing, and rancour, the cap has been raised to account for inflation - by an amount which appears to have satisfied nobody. Not least the poor innumerate journalists working in the Red Bull Ring press room when the FIA World Council decision was announced.

Everything costs more these days. Every time you walk past a petrol station – it now being too expensive to drive past – the price of unleaded and diesel has gone up. While it is fashionable to blame the war in Ukraine, many economists have been predicting a period of inflation and associated quantitative tightening since last year.

A period of inflation shouldn’t have come as a surprise to F1’s wonga wanglers, although you could say that, like porpoising, it’s a phenomenon of the 1970s and '80s today’s generation simply hasn’t had to grapple with

The era of free money is over. Having already announced its biggest interest rate increase since 2000, in late June the US Federal Reserve began unwinding the asset purchases it’s been making – trillions of dollars worth – to keep money flowing through the global economy since the pandemic hit. Other central banks in the G7 are expected to follow.

A period of inflation shouldn’t have come as a surprise to F1’s wonga wanglers, although you could say that, like porpoising, it’s a phenomenon of the 1970s and '80s today’s generation simply hasn’t had to grapple with in their lifetime. But now, like political sleaze and the hits of Kate Bush, it’s right back on the radar.

PLUS: The porpoising lesson from history and one of F1’s greatest teams

The question now is what will happen as teams test the boundaries of the permitted ‘grey area’ before punishments are imposed. Funny how Williams, supposedly F1’s poorest team, was the first to be fined for a budget cap breach – albeit a procedural one for late filing of paperwork.

Cynics might conclude that we’ll see more canaries down this particular coal mine in the months to come…

Christian Horner has claimed F1 teams might need to skip races to make the budget cap

Photo by: Mark Sutton / Motorsport Images