There’s no doubt that a big part of the background to this is a response from Max Mosley and Bernie Ecclestone to the formation of FOTA and its recent announcement of a ‘road map’ for F1. Mosley and Ecclestone do not want the teams deciding the rules or the share of commercial revenues and they are reminding them who’s boss. The £30 million budget cap is designed to repel calls for teams to receive a greater share of the revenues. It means that all the teams would be fully funded just from the share of money Bernie currently gives them, the ruse would be to pay high earners, like drivers, with a dividend from the massive profits the teams would be generating.

In the Gazzetta dello Sport, veteran writer Pino Allievi is highly critical of the budget cap, comparing it to a football league where the relegation zone teams are allowed to field 12 players against the 11 of the top teams.

“Behind this blow is the reborn alliance of Ecclestone-Mosley which faces the team’s association. It’s the beginning of a new war, whose consequences in such a fragile economy, could be devastating. Because there are a couple of big teams who have had enough of these power games and are thinking of leaving.”

Ed Gorman in the Times looks at the political iron fist behind the move and also sees the alliance of Mosley and Ecclestone as being in robust shape, in the face of the teams’ association,
“Mosley has a history of wielding a big stick to frighten the horses only to compromise and adjust his ideas through subsequent negotiation. If that is the case this time, expect to see a series of amendments to a remarkably pure concept and the budget limit figure to increase. However, there was no mistaking the mood of those close to Mosley yesterday – they genuinely believe that they have come up with the answer to Formula One’s long-term health problems. The reaction of Fota was viewed as weak by Mosley’s coterie and there can be little doubt that the FIA president and Ecclestone regard this initiative as firmly putting the teams in their collective place. And, as one source put it: “The Max and Bernie show is rolling into action in vintage form.”

Although the teams are refusing to allow FOTA be split up over this, the budget cap idea has been cleverly formulated to drive a wedge between the teams, to appeal to the poorer teams, whose very survival is a concern. The feeling is that some of them may go for some form of budget cap. It is the manufacturer teams who have the dual struggle of fighting this plan and keeping FOTA together.

As for the points debate, veteran Maurice Hamilton, now installed at the Guardian as well as the Observer, is in favour of the winner takes all approach,
“So have the FIA made the right decision? My view is that there certainly is a lot to be said for recognising the driver with the greatest number of wins. After all, if you ask any team member why they are at the races, the answer will always be: “We’re here to win. What else is there?” Sir Stirling Moss, now 79 and in happy retirement, should have at least one championship to his name.”

The teams did likewise. They did not expect this after presenting such a unanimous front the other week in Geneva. Their confidence that their unified voice would be taken into account by the FIA, when deciding rules and policy, was misplaced. Instead Max Mosley has gone much further than the teams wanted to in stripping costs out of the sport. FOTA has just put a statement out which makes clear how annoyed they are with this move,

“With regard to the decisions taken today by the FIA World Council, FOTA would like to express its disappointment and concern at the fact that these have been taken in a unilateral manner, “ said FOTA president Luca di Montezemolo. “The framework of the regulations as defined by the FIA, to be applicable as from 2010, runs the risk of turning on its head the very essence of Formula 1 and the principles that make it one of the most popular and appealing sports.

“Given the timeframe and the way in which these modifications were decided upon, we feel it is necessary to study closely the new situation and to do everything, especially in these difficult times, to maintain a stable framework for the regulations without continuous upheaval, that can be perplexing and confusing for car manufacturers, teams, the public and sponsors.”

This has the potential to open up a dangerous rift between the Formula 1 teams and the FIA just as the new season starts. It is likely that Mosley has done this to get teams to accept the general idea that there will be a budget cap system in F1, much as he did with standard Electronic Control Units, engine freezes and so on.

He has to lead them kicking and screaming to things which then get accepted. A £30 million budget cap will never be accepted, but once the teams have gone over the hurdle of the cap, Mosley probably reckons they will meet somewhere in the middle on the numbers, so around £50-60 million, which let’s face it, should be enough to run an F1 team on. But the road ahead will be rocky and this is a real test of the mettle of FOTA as an organisation.

In Geneva I asked Montezemolo whether he thought Max would feel the FOTA proposals went far enough and he said that they would put them to him and have a dialogue. It’s fairly clear that there hasn’t been that much dialogue this time around, not like in December when the FOTA engine package was agreed by the FIA in the days following Honda’s shock withdrawal.

What’s behind this? Max wants to keep the smaller independent teams in the sport and encourage new ones to come in. He hates the idea that there are two empty franchises. But the budget cap puts manufacturer-backed teams like Ferrari, McLaren Mercedes and BMW in a difficult position. They are to be given the option of spending as much as they like, but the budget capped teams will get more technical freedom, more engine power and better aerodynamics, to make them competitive. The boards of the big car firms will never accept this and you’d have a two class F1, which never worked in the turbo/non-turbo days.

The eye catching Mosley quote is the one where he dismisses suggestions that the budget cap would be impossible to police,

“We went into all this very carefully some time ago,” he said. “We involved forensic accountants from Deloitte and Touche as well as financial experts from the current teams. The vast majority of payments are traceable and any benefits in kind can be valued. There were a number of meetings. It became clear we could do it. The problem was getting the current teams to agree a figure. Also, the majority wanted a lot of exclusions such as land and buildings, the team principal’s salary and the drivers. We would also need the right to carry out very intrusive audits and impose severe penalties for overspend. However these difficulties no longer arise because each team will now be able to choose whether or not to run under the cost cap.”

The other little gem is this one,
“We will make sure these advantages do no more than balance the disadvantages the cost-capped teams will have because of their very restricted budgets. As said, we will balance the median performances by adjusting the cost-capped cars should this prove necessary. The other cars will have stable technical regulations in return for which we understand FOTA intend to provide guarantees of continuing participation until 2012, underwritten by the major car manufacturers.”

Mosley has leapt on the guarantee given in Geneva by the manufacturers to stay in until 2012 and thereby cut their wriggle room on this. On top of that he’s saying that the FIA may adjust the equivalence between capped and non-capped teams’ performance, possibly even from race to race, which he knows is not F1, but it’s a strong position from which they will eventually have to agree something.

What makes this a particularly big play is the fact that these things have been voted through, so they aren’t proposals, they are now rules which will need to be ‘unmade’ once the negotiation has taken place.

Expect more from FOTA on this…

“Todt has been one of the fundamental protagonists of the Ferrari story in the last 15 years, ” said Ferrari president Luca di Montezemolo. ” All these years together, the wins but also the difficult moments, have created a bond between Ferrari and Todt which will last for ever.”

Todt (63) arrived at Maranello in 1993 to revive the fortunes of a racing team which had lost its direction, its self respect and it’s ability to win races. It took him a while to turn the ship around, but by 1997, with the hiring of Michael Schumacher, Ross Brawn and Rory Byrne, they were fighting for the world title. Three years in a row they cam up short, although they did clinch the 1999 constructors crown and then in 2000 came the breakthrough as Schumacher won the first drivers’ title for the Scuderia since 1979. Four more followed in an era of dominance. Todt oversaw a total of 98 wins for Ferrari.

Todt was quite a devisive figure in F1, proving the oil to Ron Dennis’ water. In 2006 he became general manager of the whole of Ferrari, including road cars and he stepped down as team principal at the end of 2007 after seeing Kimi Raikkonen carry on where Schumacher left off.

Todt’s ‘win at all costs mentality’ aligned with Schumacher’s and this led to some of the most controversial moments in recent F1 history, the ultimate being the decision to switch Barrichello and Schumacher so that the latter could win the Austrian Grand Prix of 2002, a move which led to a huge fine for Ferrari and the banning of team orders in F1.

His lap of 1 min 18.343 was 5/100th faster than Rubens Barrichello’s best in the Brawn. This compares with the time of 1min 19.945, he set on the final day of the last Jerez test a fortnight ago. This does not mean that Renault has suddenly vaulted ahead of Brawn, as they were some way behind in Barcelona – a second and a bit. Jerez arguably suits their car better than Barcelona at the moment, Alonso was quick there earlier this month.

Renault had a slow start to their testing programme, but they seem to be motoring now, the new front wing they added in Barcelona, among other things, helping them find more performance.

“I’m happy with the day, ” said Alonso, “As we did more than a 100 laps which was our target for my final day of winter testing. This has been the first time we have run on a really hot track and the information we have from today will be very useful for the first few races, which are usually very hot.

There was also some encouragement for McLaren. Lewis Hamilton did a lap of 1m 19.513, using aero updates and measuring devices to check the pressure of air going through the diffuser. This indicates an improvement, although again Barcelona is the track where good aero shines more.

Tomorrow is the final day of pre-season group testing, so we will see what the final reckoning is, but this has been an astonishing pre-season ‘testing world championship” already.

On another note, it’s been a eerily quiet build up to tomorrow’s FIA world council. Given that the FIA put out a statement a few weeks ago about how a drastic cut in costs was needed and veiled suggestions of budget caps rearing their heads, the €50 million budget and so on, it’s amazing that there hasn’t been much said ahead of tomorrow’s meeting. But there has been a lot going on behind the scenes as the FIA seeks to get the balance right.

The teams’ association put its ‘road map’ to the FIA last week and we will find out tomorrow how much of it is to be adopted. Remember FOTA suggested overhauling the points system this season and making the fuel strategies transparent, among other things.

The FIA wants to go further than FOTA in cutting budgets. Tomorrow promises to be a very interesting day, which is why it’s odd that the build up has been so quiet.

BMW’s testing has gone pretty well, but not outstandingly. Many, including myself, though that they would start the year with an advantage over Ferrari and McLaren because they devoted more energy earlier to the 2009 programme than their rivals. But despite topping the time sheets occasionally at tests, they have yet to show blistering pace. Robert Kubica signed off in Barcelona on s bit of a down note, saying he felt that BMW was behind Ferrari, Brawn and Toyota.

My only thought is that last winter they masked their true performance in testing by carrying extra fuel and that became clear once the racing started. They could be doing that again, but I’m not hearing the chatter from the other teams about it like I was 12 months ago. Then again, Brawn’s performance has recalibrated everyone’s expectations.

Theissen confirms Kubica’s line last week that the team has yet to decide whether to use the KERS system in Melbourne.

” We’ve got our KERS to the stage where it is race-ready, which means we can use it in Melbourne. Now it’s just a matter of weighing up the pros and cons. On the positive side, the drivers would have an extra 82 hp at their disposal for 6.6 seconds per lap. However, the system adds weight to the car and this has an impact on the car’s weight distribution and tyre wear. We will make a decision on a driver-by-driver, circuit-by-circuit basis.”

The driver by driver bit is significant as he goes on to say that KERS really punishes heavier drivers and although Kubica is a whippet, he’s still heavier than Heidfeld. I can see Quick Nick using the system at times where Kubica doesn’t.

As to the objectives for the season, Thiessen stops short of coming out with a bald,’ We must win the title” line. He’s a master of setting achievable targets and hitting them, that’s the corporate player in him. Although the expectation now has to be to fight for the title down to the wire, he’s more cagey than that.

“We are following a long-term timetable,” he says. “In our first year we set out to finish regularly in the points, in year two we wanted to record podium finishes and in our third year we were aiming to notch up our first victory. We achieved all of these ambitious aims. In 2009 we are looking to take the next and most difficult step yet: we want to be fighting for the World Championship title. The F1.09 gives us a good platform to fulfil this aim; now we have to see what happens in the season’s 17 races. What we know for certain is that you can plan your level of performance, but not your results.”

The key question is, who’s the pace setter? Well from what I’ve seen so far this week -and the picture has been clearing as the week’s gone on – there is nothing to choose between Ferrari and BMW, with Toyota and Brawn right there too. The one thing we have not seen is the outright pace of the Ferrari and BMW cars, ie low fuel flat out.

Of those teams only Brawn has more testing days, next week in Jerez. The others have finished.

When they do longer runs, the pace in similar. On Wednesday Felipe Massa did a 20 lap run with laps in the mid to low 1min 21s. His fastest time came on the fourth lap of a six lap run and he did a 1m20.168. Interestingly his two previous laps were 1min 20.4s.

Around the same time, Robert Kubica in the BMW was on a similar programme, setting a best time of 1min 20.217 on the third lap of a four lap run, so he was 0.05s slower than Massa, albeit his run was a couple of laps shorter. It shows that they are very close to each other on performance. There will be some places where the Ferrari has the edge and others where BMW has it. And we have yet to see which of the two is the better qualifying car, but it does seem as though the Ferrari still has the tendancy to have more difficulty getting heat into the tyres on cold days. We will see.

Meanwhile Toyota’s Timo Glock also set his time on the fourth lap of a five lap run on Wednesday and he was 0.25s slower than the Ferrari, so very close indeed, even allowing for the fact that they may have had slightly different fuel loads. As Jarno Trulli said on Monday night, Toyota is there or thereabouts.

Apparently technicians who have overlaid every lap by every car say that it puts Toyota and Brawn on Ferrari’s pace with BMW a shade behind. McLaren are some way behind.

Rubens Barrichello stunned everyone by dipping under 1 min 19secs today. Massa told reporters that his Ferrari would not have been able to do that lap time. The car is very sound aerodynamically and voices around the team are saying that the Mercedes engine is as much as 70bhp up on last year’s Honda.

It is shaping up to be one of the most eagerly anticipated starts to an F1 season in years.

“Our team has been and will benefit from FOTA, first in cost reductions and help for the next three years and also from the level of support over the last three months from the all the teams.

“On the day Honda announced that they were pulling out we had support from Luca di Montezemolo and from Ron Dennis and everyone up here (the team principals on the stage) has helped us to preserve the team. I and the 700 employees thank them for that.”

Interesting that he should choose to mention the 700 employees as surely that number will be reduced by at least half as the team faces a new life as an independent operation?

Fry said that the announcement of the team’s salvation would come out ‘very soon’. Ross Brawn was not at the press conference today.

Fry refused to say any more.

The new Force India package has been launched and this team are demanding that we take them seriously. There is every reason to. They have made a very smart technical and strategic alliance with McLaren. This means that in addition to a McLaren man moving in as the CEO of Force India, they will run the same Mercedes engine as the front-runners as well as the gearbox, hydraulics and KERS system. That is starting to look like a very smart move.

Using KERS is worth two to three tenths of a second per lap over a non-KERS car, basically it comes as a boost of speed on the straight worth an extra 5mph. Doens’t sound like much but when it’s as tight in the midfield, as it look like being this season, then three tenths is a lot.

With many teams unlikely to start the season with KERS and all the signs being that the McLaren Mercedes system is working well, Force India could well have an early advantage there. Of course they have to close up the gap to the midfield teams with better aerodynamics and chassis design and we will see over the next two tests whether they have done that. In 2007 they were 2.5 seconds off the pace at Barcelona (which is a good benchmark track) and last year they cut that to 1.7 seconds. Ideally they will want to have shaved at least another 7/10ths off that with the new car. With the technical adrenalin shot McLaren has given them, that’s entirely possible.

It was relatively late that they signed the McLaren partnership, November last year, so they have not had as much time as they would have liked to fit the drivetrain into their existing design. Normally you would start the process three months earlier. But as the hydraulics come as part of the package as well, many of the bits which can lead to reliability problems are included, so the installation gremlins will be less serious than with the Honda team running the Mercedes engine, for example.

Force India has only eight days of testing plus two 50 kilometre shakedown tests before Melbourne.

Adrian Sutil goes into his third year as a driver with the team with a lot still to prove. It was very unfortunate that he missed out on that fourth place in Monaco when he was taken out by Kimi Raikkonen last year. But he has looked good at times, only to crash out or fade out when it counts. He needs a big year.

Vijay Mallya has plenty on his plate already steering his massive Kingfisher conglomerate through the economic downturn, but it looks as though F1- wise he is in the right place at the right time. If the FIA and FOTA bring in the kind of cost-saving changes they are talking about then it could be the best time for 30 years to be the owner of an F1 team with the chance of being competitive on an independent’s budget. And his deal with McLaren to buy their technology will become the blueprint for how independents go racing in the future.

RBS is conducting a review of all its sponsorships in light of the critical situation in the banking sector and the huge corporate losses shortly to be announced.

The partnership with Williams began in 2005 and was renewed in 2007 for three seasons.

RBS points out that sponsorship costs have been reduced by 25% for this year and 50% in 2010 while hospitality has been cut by 90%. RBS has made further cuts by slashing trackside advertising for 2010.

RBS noted that Williams “have been very supportive in finding ways to reduce costs over the remainder of our contract. THis early announcement allows Sir Frank and his team to plan ahead financially.”

The car looks pretty cool, I like the long think nose and the experts seem to think that there is a lot of tidy detail there, showing that the extra time in the wind-tunnel has been well spent.

The fact that Adrian Newey has been pushed into the foreground on this launch is interesting and tells me two things; first that he thinks the car is a real winner and is happy to be strongly identified with its design and second that as (surely) Red Bull’s highest paid employee they are keen to get as much value out of him as possible.

Rumours have him being paid in the £8 million a year range. If the FIA gets it’s €50 million a year budget plan through, it’ll be very interesting to see how he and RBR deal with that!

It’s not uncommon for Newey cars to come out a little later that others, but with so little testing they have to hope that the reliability is there.

Mark Webber drives the car on Wednesday. I’m told that he is well ahead of schedule on his rehab because he’s very fit and because he’s done all the right things to get it to heal as well as possible. It’s the right leg, so not the load bearing leg for braking. If he was doing a load bearing sport, like soccer he’d be out for another three months.

Team principal Christian Horner mentioned in his Q&A that the team will slim down a little because there is no test team. The figure I hear is that there will be 70 redundancies.