Spending caps won't help. First of all they can hardly be gouverned. What you'll end up with is Merc and Ferrari, who in addition to the team also have an engine development division, will end up cross-sbsidizing between these two, which allows them to circumvent the restrictions.
Even the current 'unrestricted' budgets do not directly translate into result. Ferrari has the biggest budget, closely followed by RB and McLaren, who have the same budget about 20 million less than Ferrari. Yet one of the three runs away with the championship, while the other two perform distinctively mediocre and Lotus with a much lower budget spanks them.
They make spending caps work in American sports. As for the unrestricted budgets, yes, obviously Ferrari underperform as they tend to do, but Dieter Rencken's analysis suggested RB was 33% ahead of McLaren in spends. And nearly 300% ahead of Williams. The difference between McLaren and Lotus is less than half the difference between RB and McLaren.
There is therefore a very decent correlation between spending and championship position...
Ferrari, RB, McLaren & Mercedes, Lotus, FI, Sauber & Williams, Toro Rosso, Caterham, Marussia
RB (+1), Ferrari (-1), Mercedes (=), Lotus (+1), McLaren (-1.5), FI (=), Sauber (=), Toro Rosso (+1), Williams (-1.5), Marussia (+1), Caterham (-1)
I would suggest that drivers can make a difference of 1 place tops. Lotus have a better line-up than McLaren, RB have a better number 2 than Ferrari, Hulk is better than Maldonado, and at that end a couple of places can make a disproportionate difference - yet even there the differences are minor.
To put it another way, it is inconceivable that FI could catch McLaren, let alone Red Bull, under the current financial regime.