This article analyses the Swedish case of the government’s funding for equity, which annually provides over 600 million euros to improve equity. Being one of the largest funding schemes ever for work towards educational equity it also provides full autonomy for local education authorities (LEAs) to use the money at their discretion. By studying local decisions through interviews and analysing applications and plans in nine cases, we deepen our understanding of governance relations between state, LEAs and schools. Our findings show that funding is used mostly for general purposes, rather than for specific measures to improve equity. Dynamics of governance that mitigate improvements in equity are also found. LEAs take advantage of their position as receivers and distributors of the funding to local schools, deciding what equity is and how to invest in improving it, rather than passing funds to their school units and let them decide on its use.