Adrian Newey has revealed how the maturing F1 budget cap has resulted in unexpected penalties in terms of personnel hiring.

F1 introduced Financial Regulations, including a budget cap on car and performance-related spending, in the 2021 season, with the teams now well-versed in how to restrict their spending and keep within the permitted financial limits.

Adrian Newey: I agree with cost cap, but there are hidden penalties

The introduction of the cost cap in 2021 has seen spending in Formula 1 dramatically change the landscape of the sport, with the restrictions on spending – combined with a sliding scale of aerodynamic and CFD testing – closing up the field dramatically.

The big teams, due to having a headstart on infrastructure, may continue to lead the way in terms of outright performance, but, with the regulations maturing and allowances made in terms of capital expenditure, the capabilities of every F1 team will slowly but surely converge.

Gone are the years of teams being able to spend their way out of trouble, or continuously throwing money at different ideas and solutions to find the most competitive package – teams must now work methodically and diligently to keep their car and performance-related spend under a certain capped figure.

For F1 2025, that figure will be $140.4 million dollars – the baseline is $135 million for 21 races, with an increased allowance for every race over that figure.

There are some allowances in that a team’s highest-paid three employees (who aren’t drivers) fall outside the reporting requirements, while administrative and human resource-related spending, as well as employee bonuses, are also exceptions.

But the cost of employees themselves, especially given rising costs of living, have meant there are hidden drawbacks that have presented themselves in the years since, says Aston Martin‘s Adrian Newey.

The British designer, who left Red Bull’s F1 team in May 2024 after being its chief technical officer, said that, while the budget cap has had many positives, a major issue has arisen in that F1 teams are struggling to hire the very best candidates due to more competitive salaries being available outside the F1 sphere.

Speaking in a far-ranging interview with Germany’s Auto Motor und Sport, Newey revealed what has been happening.

“The cost cap, there needs to be a way of controlling the cost for teams, or certainly the benefit from spending more in Formula 1 to make it simply an arms race where the team with the biggest budget wins – that I fully agree with,” he said.

“The cost cap, though, does come with a lot of hidden penalties, one of which is it actually means Formula 1 is no longer the best-paid industry.

“So for instance, at Red Bull, at the start if we lost people, it would almost invariably be to another F1 team.

“Now we’re losing people to tech companies because they pay better. We’re losing people to WEC teams because they pay better.

“We’re struggling to get graduates because Formula 1 can’t afford to be the best-paying industry anymore, so it has a lot of, let’s say, unexpected penalties to it.

“But what it does mean is that you’ve effectively now got an engineering budget, and therefore the fear that spending more will mean you’ll disappear is theoretically disappeared, at which point, surely you free up the regulations rather than make them ever more restrictive.

“But unfortunately, it’s not what’s happening.”

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With Newey joining Aston Martin’s F1 effort, where he starts work on March 3rd, the British designer will still have a foot in Red Bull’s camp as he continues to work with Red Bull Advanced Technologies on the RB17 – an end date for his involvement in the hypercar is yet to be decided.

All set to start helping Aston Martin’s progress in preparation for the revolutionary ruleset on the way for F1 2026, Newey was asked what regulations he’s enjoyed the most since entering Formula 1 in the mid-1980s.

“The ones with the most freedom, that’s easy!” he said.

“When I first got into Formula 1, I had on my desk at work a copy of the 1973 Technical Regulations, and it’s about three or four pages… now we have this bible and that’s before you put all the technical directives in!

“It’s so prescribed now, and I think it’s a shame.”

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