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Page last updated at 13:05 GMT, Thursday, 30 April 2009 14:05 UK

F1 teams handed 40m budget cap

F1 pit-stop

Report - Spending cap in F1

Formula One teams will be encouraged to operate within a £40m budget cap from 2010 under new cost-cutting measures announced by governing body the FIA.

Those who comply will gain greater technical freedom and unlimited out-of-season testing.

Expenditure such as driver salaries, engine costs (for 2010 only), fines, penalties and marketing and hospitality will not come under the £40m budget.

The maximum number of cars in the championship will rise from 24 to 26.

At the moment there are 20 cars, two for each of the 10 teams, but the budget cap could attract new entrants and F1 commercial rights holder Bernie Ecclestone has stated that he envisages up to three new teams in 2010.

The sport has not seen 26 cars on the grid for 15 years.

F1 Mole

After announcing a £30m cap in March, the FIA's World Motor Sport Council (WMSC) has increased that figure by a further £10m, with the formation of a new costs commission to police the regulation.

There are no fixed penalties for teams who exceed the £40m budget cap but the costs commission will judge the degree of the misdemeanour and advise the FIA, who will determine any penalty.

Teams will have be free to chose whether to be governed by the cap but those that opt out face certain restrictions.

Any team operating within the budget will be allowed to use movable front and rear wings and, crucially, an engine not subject to a rev limit.

Those teams will also be allowed unlimited out-of-season track testing, with no restrictions on the scale and speed of wind-tunnel testing.

The £40m figure will cover all team expenditure except:

• Marketing and hospitality

• Remuneration for test or race drivers, including any young driver programmes

• Fines or penalties imposed by the FIA

• Engine costs (for 2010 only, and specifically designed to retain the current manufacturers within the sport)

• Any expenditure the team can demonstrate has no influence on its performance in the championship

• Dividends paid from profits relating to participation in the championship

Ecclestone has agreed to offer participation fees and expenses to any new teams.

There will be an annual payment of $10m (£6.75m) to each team, plus free transportation of two chassis, freight up to 10,000kg in weight, as well as 20 economy-class tickets for each race outside Europe.

The WMSC has also confirmed the ban on refuelling during races, to save on costs of transporting refuelling equipment and increase the incentive for engine builders to improve fuel economy, and on tyre warmers.

Any team wishing to compete in next year's championship must notify the FIA between May 22 to 29 and state whether they wish to compete under the cost-cap regulations.

Ferrari's Kimi Raikkonen
Ferrari are one the biggest spending teams in F1

Ferrari are believed to be the most stringent opponent of financial limitations, masterminded by FIA president Max Mosley.

The Formula One Teams Association (Fota) will discuss the new proposals in London on 6 May. In January it unanimously agreed to a series of cost-cutting measures - including limits on expensive testing and a cheaper engine for smaller teams starting in 2010.

F1 is one of the biggest-spending sports in the world but the global recession has had a tangible effect, with Honda pulling out of the sport in December and Renault introducing wage reductions.

The decision to remove revs limits from engines looks to run counter to the FIA's stated aims of making F1 relevant to the future direction of road-car development and promoting sustainability.

But an FIA spokesman told BBC Sport that it was a temporary measure in a transition period in which the sport needed to balance the need for short-term economic viability against long-term environmental sustainability.

It is believed that engine supplier Cosworth, which has not been in F1 since 2006, can supply an engine at an affordable cost that revs to 20,000rpm and would outperform this year's engines, which are limited to 18,000rpm.

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see also
McLaren given suspended race ban
29 Apr 09 |  Formula 1
Renault reduce F1 staff salaries
24 Apr 09 |  Formula 1
Briatore concerned by budget rule
18 Mar 09 |  Formula 1
Global crisis hits Renault team
16 Feb 09 |  Formula 1
ING to shed 7,000 jobs this year
26 Jan 09 |  Business
F1 stars may have to take pay cut
18 Dec 08 |  Formula 1
F1 unveils cost-cutting blueprint
12 Dec 08 |  Formula 1
Global crisis ends Honda F1 era
05 Dec 08 |  Formula 1
Harsh reality catches up with F1
05 Dec 08 |  Formula 1
F1 begins talks over budget cap
31 Jan 08 |  Formula 1

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