Horner warns of F1 "catastrophe" over budget cap crisis

Amid a dramatic rise in inflation and a cost of living crisis, a number of squads are struggling to stay below the $140 million budget cap limit sent for this year.

Some outfits, like Ferrari and McLaren, have already admitted in public that they are on course to break the cap this season because costs have jumped so much – so are in desperate need of a compromise deal being put in place to help ease their situation.

While F1 chiefs and the FIA are working on finding a solution, not all outfits are in favour of a move – especially the smaller squads that do not have the spending power to get near the spending limit.

That has left things on the edge, and forced some teams to hold fire on upgrades for fear of them committing to spending at the current time that could put them in breach of the rules later in the year.

Horner is especially agitated about matters and concerned that if no agreement is reached on easing the budget cap problems, then the only way teams will be able to stay within the rules is by sacking staff or forcing a pay-cut on them.

“We've had to reign everything back,” said Horner about the impact of the budget cap debate. “I think the problem with uncertainty with a cap, and with the rate of inflation that we're seeing, is there's only parts and people that are really the biggest cost drivers.

“It would be, I think, a catastrophe for the formula that people would have to take a hit for something that is beyond their control. I think there's a moral issue that needs to be dealt with as well there.

“I know the FIA are looking at it, together with the Liberty guys, because nobody could have expected this kind of inflation.”

Christian Horner, Team Principal, Red Bull Racing

Photo by: Red Bull Content Pool

Horner says the current budget cap crisis goes beyond just being a problem for the top teams, because he says the fact that squads further down the order are suffering shows how big an issue it is.

“Perhaps I'm the one that's talked the most about it, but our problems are not the biggest in this area,” he said. “I think Mercedes, they employ more people and they have higher salaries within their group than ourselves. Ferrari is again, another very big team with high costs.

“When you hear of teams in the mid-grid that are also going to be in breach of the cap, that were pushing for the cap to be lower originally, I think it shows.

“And it's not about development. It's not about development being the biggest contributor to these costs; it's just the fixed costs of going racing with freight, with energy, with utilities, and with the supply of components. It has just gone stratospheric."