Unfortunately yes. Unfair as it may seem, Dell is only required to replace the defective hard drive free of charge under warranty, not recover the data off of the faulty one. As with any storage media sold, companies are not liable for data loss, loss of income etc. in the event of failure.
If you don't want to retain your data, they can't force you to and therefore can't charge you, but If your data is important, they're well within their rights to do so.
Also, 60GBP is a pretty good price for data recovery from a faulty HDD IMO.