Report: Formula 1 makes final proposal on cost cuts

After weeks of contentious discussion, Formula 1 has laid out its complete plan for reducing costs from 2021 onwards, with teams set to vote on the proposal in the coming days.

Measures precipitated by the financial strain of COVID-19, the proposals were detailed in a letter sent to F1 teams by managing director Ross Brawn earlier in the week, as reported by the BBC.

First and foremost, the budget cap for 2021, originally set at $175 million, will be lowered to $145m, with subsequent reductions to $140m in 2022 and $135m in 2023, where it will then stay until at least 2025.

Secondly, teams will be restricted on the amount of aerodynamic research they can perform depending on their success in the previous season. Based on a benchmark set by the FIA of total wind-tunnel time and computing data, the top three teams in the championship will be limited to 70% of that total for the following year, the fourth team 80%, and then 5% increases for each team after that, meaning the 10th-placed team gets 110% of the benchmark — 40% more than the front-runners.

Finally, teams who purchase parts from other teams will have the “notional value” of those parts subtracted from their overall cap number, which is something supplier teams have been pushing for so that their efforts in research and development are taken into account.

Now the question is whether the proposals will meet with approval from the teams themselves — although with the FIA’s recent introduction of a “safeguard clause” in its sporting regulations, it only needs five outfits to agree to push the changes through.