Informal footwear, that is, in the city (7)
I believe the answer is:
wellies
'informal footwear' is the definition.
'wellies' can be an answer for 'footwear' (I've seen this before). I'm not certain of the 'informal' bit.
'that is in the city' is the wordplay.
I cannot really understand how this works, but
'that is' could be 'ie' (short for Latin 'id est', 'that is') and 'ie' is present in the answer.
'city' could be 'wells' (I've seen this before) and 'wells' is found in the leftover letters.
This accounts for all the letters.
This explanation may well be incorrect...
Can you help me to learn more?
(Other definitions for wellies that I've seen before include "Muddy footwear?" , "Rubber boots (colloq.)" , "provincial students in the main" .)