Formula One News

The FIA's announcement that Red Bull was guilty of busting Formula 1's cost cap limit last year has confirmed the worst fears of its main rivals.

But what is crystal clear is that while the labelling of Red Bull's overspend has been officially classified as a "minor" breach, its opposition sees it as anything but a small matter.

To be classified as a "minor" offence rather than a "material" one, teams must have overspent by less than 5% of the allowance. So with last year's cost cap being roughly $145 million, that could still be up to $7.25 million.

There has been no confirmation from the FIA or Red Bull about the scale of the breach, but there have been plenty of suggestions it is somewhere between $1 million and $2 million.

That may seem quite a small amount of money in the grand scheme of things but when it comes to development budgets, extra spending like that ultimately makes a big difference.

Lewis Hamilton has made reference to just $500,000 more development money being unlocked for Mercedes last year as enough to allow it to bring a new floor design, which would have lifted the pace of his car to potentially change the outcome of the title chase.

As his team boss Toto Wolff said at the Singapore GP: "If it is a so-called minor breach, I think the word is probably not correct.

"If you're spending 5 million more, and you're still in the minor breach, it still has a big impact on the championship.

"To give you an idea, we obviously monitor closely which parts are being brought to the track from the top teams every single race - 2021 season and 2022 season.

"We can see that there are two top teams that are just about the same and there is another team that spends more. So we know exactly that we're spending three and a half million a year in parts that we bring to the car. And then you can see what difference it makes to spend another 500,000 - it would be a difference.

"We haven't produced lightweight parts for the car in order to bring us down from a double-digit overweight because we simply haven't got the money. So we need to do it for next year's car.

"We can't homologate a lightweight chassis and bring it in, because it's just $2 million that we will be over the cap. So you can see every spend more has a performance advantage."

It is this trade-off between spending and performance that top teams have had to juggle under the cost cap era, and that is why the overspending of a rival is such a big matter for them.

Ferrari in particular has called several times for maximum sanctions given out. The team believes it is the only way to ensure that squads robustly follow the cost cap in the future and aren't encouraged to game the system by trading off an overspend to secure richer rewards than any punishment dished out will cost them.

Ferrari has said nothing publicly since the FIA's statement on Red Bull's breach, but it is understood the team's stance remains unchanged, and that it wants financial breaches to be treated as strictly as technical infringements where cars are disqualified if parts a few millimetres out.

For Red Bull's main rivals, perhaps even more important than any potential sanction being handed is that there is complete transparency in how the case is handled.

So far, the FIA has offered little insight into the scale and motives of the Red Bull breach, and that lack of information for such a big topic has inevitably triggered wild speculation.

Was Red Bull's procedural and minor overspend the result of a small paperwork delay and innocent spending – such as a subsidised canteen at Milton Keynes, sick pay and gardening leave payments – being unexpectedly added on to the team budget by FIA interpretations and pushing it over the limit?

Or has there been some deliberate attempt to fudge paperwork, block investigations and deliberately find ways around the cost cap to ensure that Red Bull can spend more on car development than its rivals?

Red Bull's "surprise and disappointment" at being accused of breaching the cost cap would suggest it was more the first case. However, without firm answers, rivals' suspicions will inevitably fear it could be the second.

That is why it is essential, as much for Red Bull as for the rest of the grid, that the FIA explains things in detail, and does not go down the route of secret backroom deals.

F1's financial regulations are actually clear in how they require the FIA to publish details of the decisions made in relation to rule breaches.

If teams choose to go for an Accepted Breach Agreement, where it owns up and takes responsibility for breaking the rules, then the matter will be released.

Article 6.32 of F1's financial regulations states: "The Cost Cap Administration will publish a summary of the terms of the ABA, detailing the breach, any sanctions, and any enhanced monitoring procedures, omitting any Confidential Information."

Even if the team chooses to take the matter on and go in front of judges so it can plead its case, then equally the final judgement will be made public.

Article 7.27 of the rules states: "The Cost Cap Adjudication Panel will publish the decision of the judging panel and the grounds upon which they are based, save for any Confidential Information."

But while these offer some hope of answers for Red Bull's rivals about the scale and scope of what happened, and the FIA's responses, they still open the door for the governing body to try to play matters down.

For now, Red Bull's rivals are holding a watching brief and awaiting the next steps.

As Ferrari team principal Mattia Binotto said at the weekend: "I think what we need and what I'm expecting is full transparency and clarity on the discussions that may have happened."

And if that is not forthcoming, then the FIA risks an even bigger controversy in the future.

Make any sanction too weak, or leave other teams unclear about the details of the cost cap breach by keeping things too secret, and trust in the whole system will break down very quickly.

That would then threaten the very existence of the cost cap which has been viewed as a core element of F1's long-term health.