Sort pen out in the city (7)
I believe the answer is:
preston
'city' is the definition.
(I've seen this before)
'sort pen out' is the wordplay.
'out' is an anagram indicator (out can mean wrong or inaccurate).
'sort'+'pen'='sortpen'
'sortpen' anagrammed gives 'PRESTON'.
'in the' is the link.
(Other definitions for preston that I've seen before include "Town on the Ribble" , "city (as of 2002)" , "Town in Lancashire" , "City in Lancashire" , "Administrative centre of Lancashire" .)