Observe group around centre of Burnley showing contempt (8)
I believe the answer is:
sneering
'contempt' is the definition.
(sneering is a kind of contempt)
'observe group around centre of burnley' is the wordplay.
'observe' becomes 'see' (I've seen this before).
'group' becomes 'ring'.
'around' is an insertion indicator.
'centre of' indicates the central letters.
The central letter of 'burnley' is 'n'.
'see'+'ring'='seering'
'seering' placed around 'n' is 'SNEERING'.
'showing' is the link.
(Other definitions for sneering that I've seen before include "Smiling contemptuously" , "Showing scorn or contempt" .)